Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

MANCHESTER CORPORATION BILL

Lords Amendments considered and agreed to.

EDINBURGH CORPORATION ORDER CONFIRMATION BILL

Read the Third time and passed.

PETITIONS (COTTON TEXTILE INDUSTRY)

Mr. H. Hynd: Mr. Speaker, Sir, with your permission I wish to present a Petition signed by the chairman of the Council and 800 inhabitants of the comparatively small town of Rishton, one of those Lancashire towns suffering from depression in the cotton industry. They make three points which have not been made in previous Petitions, namely, that half the mills in the town are shut down, that the population has declined from 7,400 to 5,500 since the war, and—this is a significant point—that 3 per cent. of the houses in the town are standing empty because people have left to find jobs elsewhere.
The prayer reads as follows:
Wherefore, your Petitioners pray that your Honourable House will take immediate action (i) to limit the importation of textile goods produced under unfair competitive conditions at prices with which it is not possible to compete in this country; (ii) to endeavour by all means possible to encourage and foster the consumption in the United Kingdom of textile goods produced in Britain; and (iii) to extend the demand in foreign markets for textiles

produced in Britain when negotiating trade agreements.
And your Petitioners, as in duty bound, will ever pray.

To lie upon the Table.

Mr. Anthony Greenwood: Mr. Speaker, with your permission and that of the House, I wish to present a Petition signed by the Mayor of Haslingden, Councillor Ben Fisher, and over 4,000 people in the Borough of Haslingden in the County Palatine of Lancaster. It is a town which is very greatly dependent on the cotton industry, and the Petition draws attention to the decline of the industry in recent years following a drop in exports and a rise in the importation of fibres and manufactured goods made overseas. This, says the Petition,
has resulted in widespread depression in the industry with unemployment and underemployment to an extent not fully revealed in the published statistics.
The Petition concludes:
Your Petitioners, therefore, humbly pray that your Honourable House will take action without delay to limit the import of cheap textiles produced under unfair competitive conditions and will devote itself to saving the cotton towns of Lancashire from becoming derelict by taking prompt action to stimulate and revive the cotton industry.
And your Petitioners, as in duty bound, will ever pray.

To lie upon the Table.

Mr. Rhodes: I beg to present a Petition on behalf of some 28,000 citizens of the Borough of Ashton-under-Lyne and district. The Petition is similar in its terms to those Petitions coming from other areas in the County Palatine. After reciting the circumstances and the difficulties and the growing unemployment in the district, it continues:
Your Petitioners, therefore, humbly pray that your Honourable House will take effective action to secure the stabilisation of the textile industry so that it will be prosperous in times of peace and capable of meeting the country's need in any time of emergency and so that the textile workers may be assured of reasonable security of employment.
It concludes:
And your Petitioners, as in duty bound, will ever pray.

To lie upon the Table.

Oral Answers to Questions — HISTORY OF EUROPEAN RESISTANCE (LIEGE CONFERENCE)

Dame Irene Ward: asked the Secretary of State for Foreign Affairs who were the official British delegates at the Conference at Liège on the possibility of producing a history on international resistance; and what decisions were taken.

The Joint Under-Secretary of State for Foreign Affairs (Mr. John Profumo): No official British delegation attended the International Conference at Liège on the history of European resistance. There was, however, an unofficial British delegation which attended the Conference on behalf of the Special Forces Club. I understand that the Conference decided to set up a provisional international committee on the history of European resistance.

Dame Irene Ward: While thanking my hon. Friend for that answer, may I ask whether the British unofficial delegation will participate and what documents they will have to put before the international conference?

Mr. Profumo: Her Majesty's Government will give sympathetic consideration to any request for assistance.

Oral Answers to Questions — UNITED NATIONS

Cyprus

Mr. Donnelly: asked the Secretary of State for Foreign Affairs whether he will make a statement regarding the course and conclusion of the Cyprus debate at the United Nations.

Mr. Brockway: asked the Secretary of State for Foreign Affairs what decisions have now been reached by the United Nations Assembly on the subject of the situation in Cyprus.

The Minister of State for Foreign Affairs (Commander Allan Noble): I have nothing to add to the Statement which my right hon. Friend the Prime Minister made to the House last Wednesday.

Mr. Donnelly: How do the British Government expect to make progress in Paris with the reintroduction of the issue of partition by the Colonial Secretary? Will the right hon. and gallant Gentleman tell the House what explanation has been given by the British delegation in Paris to allay the Greek Government's fears?

Commander Noble: My right hon. Friend the Colonial Secretary was merely repeating, as was stated in May, I957, that preliminary investigations were made as to whether partition was a practical possibility and into the problems involved.

Mr. Bevan: Is this not a singularly stupid moment to select to make a statement of that sort, in view of the fact that we hope that a conference will be held and that the conference will result in a settlement? Will not the Colonial Secretary take the earliest opportunity of repudiating the rumour which has got abroad to the effect that a plan for partition has been drawn up in the event of agreement not being reached?

Commander Noble: If the right hon. Gentleman will study the statement which was made in May, 1957, I think he will understand the position.

Mr. Bevan: Is it not desirable for a statement to be made now to allay Greek fears before the conference is held? Do the Government want a settlement at all in the matter?

Commander Noble: I am quite sure that the Greek Government will appreciate the statement which I have just made.

Mr. Biggs-Davison: Will my right hon. and gallant Friend make it plain that the Cyprus question is a very special case and that it is not the Government's intention to submit other matters affecting the internal affairs of British territories to the United Nations?

Commander Noble: Yes, most certainly. I think I made that clear in my speeches in the General Assembly.

Mr. Brockway: In view of the disastrous effect which the reported statement of the Secretary of State for the Colonies has had both in Cyprus and in Greece, will not the right hon. and gallant Gentleman. if he seriously desires a solution of


this problem from a conference, go much further in repudiation than the statement which he has just made?

Commander Noble: I have nothing further to add at the moment. There is. a Question on the subject on the Order Paper later this week.

White Paper

Mr. Royle: asked the Secretary of State for Foreign Affairs if he will issue a White Paper periodically to inform hon. Members of decisions taken at the United Nations, with explanations of votes cast by the United Kingdom.

Commander Noble: A White Paper about the current Session of the General Assembly of the United Nations will be issued in the usual way as soon as possible after the Session is over.

Mr. Royle: Will the right hon. and gallant Gentleman see that what takes place in the United Nations in our name is available more easily and more conveniently to hon. Members than has been the case hitherto?

Commander Noble: I do not know whether the hon. Member is aware that United Nations documents usually arrive in London two or three days after they are issued in New York. They are the working papers of the General Assembly. They include verbatim records of all the speeches in the Plenary Sessions of the Assembly and in the Political Committee. They also include summary records of speeches in the other six committees, including explanations of votes. They give the texts of resolutions and details of voting. I think that the information is available in the House a fairly short time after the events have happened.

Mr. Royle: I am aware of that, but is it not desirable that these things should be made much more conveniently available to hon. Members, rather than hon. Members having to wade through all the documents? Is he aware that a White Paper at our disposal in the Vote Office would help very much?

Commander Noble: I will certainly take note of the hon. Member's views.

United Nations Force (Film)

Mr. Swingler: asked the Secretary of State for Foreign Affairs if he will make representations to the United Nations

Secretary-General for the early release of the film, "Blue Vanguard," so that the history and work of the United Nations Force in the Middle East may be made more widely known.

Commander Noble: No, Sir.

Mr. Swingler: Will not the right hon. and gallant Gentleman at any rate find out who is holding up the release of this very interesting film about the attitude of the United Nations organisation and its handling of the course and consequence of the Suez war? The Minister has denied that the Foreign Office has made any objection to its release. Does it mean that it has been blackballed by one or two Governments in the United Nations and that a film specially made to advertise the achievements of the United Nations cannot be released?

Commander Noble: As I think has been made clear to the hon. Member in previous Answers, release is a matter for the Secretary-General of the United Nations. He has a lot of films and other material available to him and it is up to him to decide when it should be released.

Middle East (Refugees)

Mr. Short: asked the Secretary of State for Foreign Affairs whether, in view of the speech of Mr. Abba Eban in the United Nations General Assembly's Political Committee on 17th November, Her Majesty's Government will now take the initiative in seeking a solution to the Middle East refugee problem.

Commander Noble: This is a problem principally for the United Nations, of which the Relief and Works Agency is a subsidiary body. On 10th December the Special Political Committee of the General Assembly adopted a resolution urging the need for more funds for the United Nations Relief and Works Agency; progress in rehabilitation projects and consultations regarding repatriation and compensation of refugees. Her Majesty's Government co-sponsored this resolution.

Mr. Short: Cannot the Minister of State go further? Does he not agree that Mr. Abba Eban's speech marks some progress, in that the Israeli Government are now willing to pay compensation before a settlement? Will not the Government take some initiative in this matter?

Commander Noble: It is not a question of initiative by Her Majesty's Government, but no doubt the appropriate authorities of the United Nations will take notice of the points raised by the hon. Member.

Oral Answers to Questions — BAHRAIN (TREATY OBLIGATIONS)

Mr. Harold Davies: asked the Secretary of State for Foreign Affairs if he will list the treaty obligations which the United Kingdom now have with Bahrain; and, in the light of these obligations, what consultations have recently taken place between Her Majesty's Government and the United States concerning the use of Bahrain as a base in connection with the proposed establishment of a Fifth American Fleet in the Indian Ocean.

Mr. Profumo: Her Majesty's Government have a treaty obligation to support Bahrain in case of need and to maintain her independence. No consultations of the kind mentioned by the hon. Member have taken place between ourselves and the United States Government.

Mr. Davies: Is the hon. Member saying that there has been no request for the use of Bahrain for the proposed Fifth American Fleet in the Indian Ocean? Secondly, do our treaty obligations mean that if military Iran decided that it wanted Bahrain, we have an obligation to protect Bahrain against the people of Iran if they want that island once more?

Mr. Profumo: The answer to the first part of the supplementary question is "Yes, Sir." The second part, I think, is hypothetical. At all events, it goes further than the Question on the Order Paper, and I think that the hon. Member will have to put it down on the Paper.

Oral Answers to Questions — ARAB PETROLEUM CONGRESS, CAIRO

Mr. Harold Davies: asked the Secretary of State for Foreign Affairs what British dependencies will be officially represented at the first Arab Petroleum Congress, Cairo, from 16th to 20th April, 1959.

Mr. Profumo: None, Sir. So far as the Shaikhdoms in the Persion Gulf are concerned, I understand that Kuwait will be represented.

Mr. Davies: Will the hon. Gentleman try to make available to hon. Members in the Library as much information as possible about this very important Arab Petroleum Congress so that we can follow it by Question and Answer, if need be?

Mr. Profumo: I shall have to see whether there is any more information than I have given the hon. Member.

Mr. Davies: Obviously there is.

Oral Answers to Questions — COUNCIL OF EUROPE (RECOMMENDATIONS)

Mr. Marquand: asked the Secretary of State for Foreign Affairs what decisions have been taken by the Council of Ministers upon Recommendations 158 and 159 concerning aid to less developed areas and the development of Africa, passed unanimously by the Consultative Assembly of the Council of Europe.

Mr. Profumo: The Committee of Ministers commented on these two Recommendations in the Report which they presented to the Consultative Assembly of the Council of Europe at their meeting in October. This report has been published.
While recognising the importance of the principles laid down in Recommendation 158, the Committee of Ministers said that they were unable to reach a decision on the political aspects of the Recommendation until the current negotiations on the Free Trade Area and on the links to be established with the Six Power Community had reached a sufficiently advanced stage.
With regard to Recommendation No. 159, the Committee of Ministers have reported to the Assembly that they have not yet reached a decision concerning a conference proposed in the Recommendation but that, for similar reasons, they considered that in any case such a conference could not usefully be held in the immediate future.

Mr. Marquand: With regard to the second of the two recommendations, whatever the feeling may be about a conference, is the hon. Member aware that the proposals for an Investment Statute and a Guarantee Fund have


aroused widespread interest and have recently been repeated in a resolution by the N.A.T.O. Parliamentarians? In consultation with his right hon. Friend the Secretary of State for the Colonies, will he do all he can to see that these Recommendations are studied and widely made known?

Mr. Profumo: Yes, Sir, we will certainly see that they are studied, but the right hon. Gentleman will recognise that the Recommendations deal with matters of very considerable importance, and, of course, they are by no means simple.

Mr. Marquand: asked the Secretary of State for Foreign Affairs whether the Council of Ministers have yet considered the Recommendation of the Consultative Assembly of the Council of Europe concerning the exploitation of natural gas in the Northern Sahara; and what conclusion it has reached.

Mr. Profumo: As my right hon. Friend told the House on 26th November, recommendation 167 was referred to the Organisation for European Economic Cooperation. That Organisation has meanwhile decided to send the Recommendation to the appropriate Technical Committee for study.

Mr. Marquand: Here again, may I ask the hon. Member whether he will draw the attention of his right hon. Friend the Secretary of State for the Colonies to the Recommendation while it is being studied elsewhere? Is he aware that the Council of Europe unanimously recommended that these immensely valuable new resources in the Sahara should be used for the benefit of the African peoples? Will he draw his right hon. Friend's attention to that opinion?

Mr. Profumo: I certainly will, but I should point out that the exploration of the natural resources of the Sahara is primarily a matter for the French Government.

Oral Answers to Questions — GUINEA (STERLING AREA MEMBERSHIP)

Mr. Dugdale: asked the Secretary of State for Foreign Affairs whether the Republic of Guinea has now officially asked to come into the sterling area; and what reply Her Majesty's Government have given to the request.

Commander Noble: The answer to the first part of the Question is, "No, Sir." The second part does not therefore arise.

Mr. Dugdale: Is the right hon. and gallant Gentleman aware that this is not a matter which can be decided by this country alone? Will he make it quite clear that this Government will welcome such a request; and, indeed, would welcome the closer association of Guinea with the Commonwealth?

Commander Noble: The hon. Member asked whether such a request had been made and I said, "No." I am afraid that that is as far as I can go today.

Oral Answers to Questions — U.S.S.R.

Press Facilities

Mr. Donnelly: asked the Secretary of State for Foreign Affairs what steps he has taken to secure reciprocal facilities for British newspaper men in Russia similar to those afforded by him to Russian newspaper men in Great Britain.

Mr. Profumo: In April of this year Her Majesty's Government proposed to the Soviet Government that talks should be held on various aspects of freedom of information, including freedom of travel for journalists to and within the Soviet Union and freedom to send uncensored news reports out of the Soviet Union. The Soviet Government refused to take part in such talks.

Mr. Donnelly: Can the hon. Gentleman say approximately how many Soviet journalists there are here and how many British journalists there are in Russia, and what kind of restrictions on travel are imposed on Russian journalists here and on our journalists there?

Mr. Profumo: Very little restriction is imposed on Soviet journalists here, in fact no more than on any other journalists. All reasonable requests are granted. Very serious restrictions on travel and certainly on sending reports out are imposed on our journalists in Moscow. As to correspondents, in London there are five, representing Tass, Moscow Radio, Trud, Pravda, Izvestia and Komsomols Kayo Pravda. There are two resident British correspondents in Moscow, representing Reuters and the Daily Worker, and two assistants in Reuters' office.

London-Moscow Air Services

Mr. Willey: asked the Secretary of State for Foreign Affairs what recent representations have been made by the British Embassy at Moscow about the proposed air services between Moscow and London; and if he will make a further statement.

Mr. Profumo: As my right hon. Friend the Minister of Transport and Civil Aviation said on 19th November, the introduction of a service depends on a solution of the noise problem. It had been hoped that as a result of an invitation extended by the Chairman of British European Airways, and supported by Her Majesty's Ambassador in Moscow, it would be possible for the Chairman of the Soviet airline to come to London for discussions on this problem and also for a demonstration of the noise-reducing techniques worked out for the TU. 104. I have now learned that, unfortunately, it will not be possible for Marshal Zhigarev to pay a visit at present.

Mr. Willey: As these negotiations seem to have become deadlocked and meanwhile we are losing the traffic to Brussels and Paris, will the hon. Gentleman see that the good offices of the Foreign Office are used to try to break the deadlock?

Mr. Profumo: These are technical matters, and it would be wise to leave them to the technicians to solve.

Oral Answers to Questions — UNITED ARAB REPUBLIC (DIPLOMATIC RELATIONS)

Mr. Donnelly: asked the Secretary of State for Foreign Affairs if he will make a further statement on his progress towards the resumption of diplomatic relations with the United Arab Republic.

Commander Noble: I have nothing at present to add to the answer which my right hon. and learned Friend gave to the hon. Member on 19th November.

Mr. Donnelly: Can the right hon. and gallant Gentleman say whether agreement has been reached on the sums of money to be paid by the Egyptian Government to us for British property taken, and by us to the Egyptian Government for damage done over Suez? Is it true that we have reached a point where the sums have been agreed?

Commander Noble: I am afraid that I cannot say anything while there is still a probability of the resumption of negotiations.

Mr. Bevan: Is there any point at all in not extending diplomatic recognition now to that nation? Are we not handicapping ourselves more than we are handicapping the Egyptians? Have we not suffered grave inconvenience from the fact that we have no representation at Cairo at present?

Commander Noble: I think my right hon. and learned Friend the Foreign Secretary made it clear on 19th November that we think it advisable that financial agreement should be reached first.

Mr. Bevan: Why?

Oral Answers to Questions — SUEZ OPERATIONS

Mr. Zilliacus: asked the Secretary of State for Foreign Affairs whether, in view of the damage caused to this country's reputation by the allegations, of which official notice has been taken, of collusion and misrepresentation in connection with Suez, made recently in the Press, he will propose to the French Government the joint publication of the minutes of the conversations between British and French Ministers in London on 10th October, 1956, and between the British and French Prime Ministers and Foreign Secretaries in Paris on 16th October.

Commander Noble: No, Sir.

Mr. Zilliacus: Is the right hon. and gallant Gentleman not aware that the facts are admitted officially in France that there was an alliance with Israel, that French planes were based on Cyprus and from there took part in the operation, and that these plans were concerted between the French and British Governments on 10th and 16th October? Is the Minister really content that the Government should lie under these charges instead of taking steps to ascertain the truth?

Commander Noble: Her Majesty's Government have repeatedly denied the allegation of collusion and conspiracy, and the position has not changed.

Mr. Bevan: Is the right hon. and gallant Gentleman aware that no one believes that, either on that side of the House or on this?

Hon. Members: Answer.

Mr. Emrys Hughes: asked the Secretary of State for Foreign Affairs why the spokesman of the Foreign Office at his Press Conference on 3rd December. referring to certain statements by Mr. Randolph Churchill on Suez, said that they appeared in many respects to be inaccurate; and if he will publish the statements to which he referred and the corrections he thinks necessary in the public interest.

Commander Noble: With regard to the first part, have nothing to add to what my right hon. Friend the Prime Minister said last week. The answer to the second part of the Question is, "No, Sir."

Mr. Hughes: Is the Minister of State for Foreign Affairs aware that Mr. Randolph Churchill has definitely alleged that he has reason to know that Mr. Hope received instructions through the Foreign Office from 10 Downing Street? Is not that one of the reasons why the Prime Minister is silent? Is the Minister aware that I have here the whole of the series of articles written on Suez by Mr. Randolph Churchill? Is the Minister aware that millions of people have now become interested in this controversy? If I sent the Minister these cuttings, would he undertake to mark on them the passages which have been described as inaccurate?

Commander Noble: I have nothing to add to what my right hon. Friend said earlier.

Mr. Hale: In view of the fact that these articles make a specific allegation against the Government, that of planning an aggressive war, for which fifteen war criminals were hanged at Nuremburg, does the Minister feel that he is upholding the dignity and reputation of the British Government by showing that he is not even concerned to say that he and his colleagues were not guilty of capital offences?

Hon. Members: Answer.

Mr. Bevan: Why does the right hon. and gallant Gentleman not answer the question? It is a very serious question. A charge has been made that the Government of which he is a member did plan an aggressive war against another nation, and that, of course, is a criminal act.

What answer has the right hon. and gallant Gentleman to make?

Commander Noble: As I have said, I have nothing to add to what my right hon. Friend has said. What the right hon. Member for Ebbw Vale (Mr. Bevan) and the hon. Member for Oldham, West (Mr. Hale) are saying may well be one of the inaccuracies.

Mr. Bevan: Is this what might be called the negative approach to truth? Must we go on asking a whole series of questions in order to get a statement from the Government that any single allegation may be inaccurate? Are we to assume that what is not declared to be inaccurate is accurate? Is that to be a substitute for the Select Committee we want? Is that the way to get at the truth?

Commander Noble: My right hon. Friend the Prime Minister made the position quite clear last week, as I have today, in answer to the Question of the hon. Member for Gorton (Mr. Zilliacus).

Oral Answers to Questions — ICELAND (FISHING LIMITS AND TERRITORIAL WATERS)

Mr. Wall: asked the Secretary of State for Foreign Affairs what recent proposals he has made to the Icelandic Government regarding the dispute over fishing limits and territorial waters; and if he will make a further statement.

Commander Noble: My right hon. and learned Friend has made no recent proposals but, as the Icelandic Government are aware, Her Majesty's Government have throughout been ready to negotiate concerning this dispute. He has also proposed that the issue should be referred to the International Court of Justice, but there has been no response to this suggestion.

Mr. Wall: Can my right hon. and gallant Friend say whether an official proposal for a truce over the dispute over fishing limits has been made until the matter can be settled by convening an international conference? Has Iceland given any reason for not taking the dispute to the International Court of Justice?

Commander Noble: The answer to the second part of the supplementary question is that Iceland has given no reason for


not taking the dispute to the International Court. As far as I am aware, Iceland has not referred to our proposal and there has been no suggestion of a truce.

Mr. Younger: Has the matter not become much more urgent since apparently the United Nations has decided not to hold its renewed conference until 1960? Does not that mean that unless something is done about interim arrangements the fishing fleets will have to go through another summer as well as the winter before there is any amelioration?

Commander Noble: The United Nations has decided to have a conference in 1960. We would have preferred an earlier conference. We made our position clear. I agree, therefore, that it is all the more urgent that some decision should be taken on this, and, as we have said, we are always ready for negotiations with the Icelandic Government on this subject.

Lady Tweedsmuir: Does the fact that the conference will not be convened until 1960 mean that the proposal by the Danish Government for an extension to twelve miles of the limit from the Faroes is also in abeyance?

Commander Noble: Discussions with the Danish Government are still proceeding.

Mr. Wall: asked the Secretary of State for Foreign Affairs whether he will now make a statement about the incident involving the trawler "Hackness".

Commander Noble: Her Majesty's Government replied on the 4th December, to protest from the Icelandic Government about the "Hackness". We have proposed that there should be further study through the diplomatic channel to establish the facts. According to the information available to Her Majesty's Government, the "Hackness" was not within three miles of the shore as claimed by Iceland and had not transgressed against Icelandic law as regards the stowage of her gear.

Mr. Wall: In view of the Communistic propaganda, or rather the use which the Communist Party all over the world has made of this incident, will my right hon. and gallant Friend give as much publicity as possible to the fact that the vessel was not accused of actually fishing inside the Icelandic claimed limit, and was not even fishing at all?

Commander Noble: I will certainly do what I can, and I am very glad that my hon. Friend has made that point.

Oral Answers to Questions — GERMANY

Berlin

Mr. A. Henderson: asked the Secretary of State for Foreign Affairs whether he will make a further statement on the discussions which are taking place with regard to the future status of Berlin.

Commander Noble: My right hon. and learned Friend discussed the question of Berlin with the Foreign Ministers of the United States, France and the Federal Republic of Germany yesterday in Paris. Hon. Members will have seen the communiqué which was issued following that meeting. The question is also to be discussed tomorrow with our Allies at the Ministerial Meeting of the North Atlantic Treaty Organisation.

Mr. Henderson: In view of the unusual legal position which has arisen as a result of the unilateral repudiation by the Soviet Government of their obligations under the Quadripartite Agreement, are the Government considering proposing that the legal aspects of this problem should be referred to the International Court?

Commander Noble: All aspects of this problem will be considered, but I do not think that I should say anything further today in view of the meeting tomorrow.

Missiles

Mr. Bevan: asked the Secretary of State for Foreign Affairs what representations have been received by the Council of Western European Union from the Federal Government of Western Germany regarding the lifting of the ban on the German manufacture of missiles.

Commander Noble: None, Sir.

Mr. Bevan: Is not the right hon. and gallant Gentleman aware that the other day—I think it was 5th December—a spokesman at Bonn made a statement to the effect that the Federal Government were going to ask for certain co-operation with France and Italy and the making of nuclear weapons would soon be put in hand and they would be asking


the British Government to agree? If that request is made, are we going to agree?

Commander Noble: Referring to the first part of the right hon. Gentleman's question, the Council of Western European Union amended Article 4 of Protocol No. III of the revised Brussels Treaty on 9th May, 1958, in order to permit the Federal German Government to manufacture guided anti-tank missiles. The Council of W.E.U. has received no other representations from the German Government about the manufacture of missiles.

Mr. Bevan: If such a request is made, what will the answer be?

Commander Noble: That is a hypothetical question.

Mr. Bevan: In view of the fact that the other day the Foreign Secretary made a very great point of the fact that the nuclear weapons in Germany were under American control and no other control whatsoever and that the Germans had entered into a guarantee not to make nuclear weapons, do we understand that if such a request is made it might be acceded to without this House being told anything about it?

Commander Noble: I think that the right hon. Gentleman is mixing up nuclear weapons and missiles. It is laid down in the Treaty of Brussels that the Federal Republic may not manufacture nuclear weapons. If they wish to manufacture certain types of small missiles, they have to apply through the channels which I have just outlined.

Oral Answers to Questions — SPECIAL OPERATIONS EXECUTIVE

Dame Irene Ward: asked the Secretary of State for Foreign Affairs whether he will make arrangements for information contained in the files of the Special Operations Executive to be made available to those interested in them.

Mr. Profumo: Although for security reasons it is not possible to allow members of the public to have direct access to the archives of the Special Operations Executive. my right hon. and learned Friend considers that grounds exist for

adopting a less restrictive attitude than hitherto in regard to the release of information.
Arrangements are accordingly being made in the Foreign Office to assign a former officer with war-time experience of the Executive to advise and assist inquirers and in general to deal with questions regarding the release of information on the Special Operations Executive.

Lieut.-Colonel Cordeaux: Does not my hon. Friend agree that this latest suggestion by my hon. Friend the Member for Tynemouth (Dame Irene Ward) has really gone beyond a joke, in view of the harm already done by these amateur spies cashing in on their war experiences by turning amateur authors? Will he ensure that what has not yet been disclosed of Services technique and practice remains secret from now on? Will he deny access to these files to all historians, professional or amateur, or other unauthorised persons?

Mr. Profumo: The operations of S.O.E. have been subjected on several occasions to criticism, much of it damaging and irresponsible. The arrangements that I now envisage will, I hope, assist in disposing of these charges.

Dame Irene Ward: Will my hon. Friend point out to my hon. and gallant Friend the Member for Nottingham, Central (Lieut.-Colonel Cordeaux) that this new suggestion emanated from the Foreign Office. I thank my hon. Friend for trying to find some way of ensuring that wild statements and rumours are not spread all over the world without some distinction between what should properly be disclosed and what should not.

Mr. Profumo: I am grateful to have been of help to my hon. Friend, but I should prefer not to get between her and my hon. and gallant Friend.

Oral Answers to Questions — FOREIGN OFFICE (OFFICIAL STATEMENTS)

Mr. Emrys Hughes: asked the Secretary of State for Foreign Affairs how many official spokesmen are employed by his Department to make statements on foreign policy.

Mr. V. Yates: asked the Secretary of State for Foreign Affairs how many Government servants employed in the Foreign


Office are authorised to make official statements to the Press.

Commander Noble: Eight officials are employed in the News Department of the Foreign Office to deal with inquiries made by the Press.

Mr. Hughes: Would not the Minister agree that it is very wrong to embroil civil servants in the maelstrom of controversial politics, as was done in this case? If the Foreign Secretary wished to attack Mr. Randolph Churchill, why did he not have the courage to do it himself? Is any of these eight spokesmen qualified to contradict the statement made in the Sunday Express yesterday by an hon. Member on his own side, the hon. Member for Berwick-upon-Tweed (Viscount Lambton), who said that the Foreign Secretary had told New York journalists that there were blunders at Suez? If there were blunders at Suez, could not the right hon. and gallant Gentleman tell the Foreign Secretary to resign?

Commander Noble: I do not know whether the hon. Member knows what happens at Press conferences. A Press conference is held in the Foreign Office every day at 12.30 p.m., when the Foreign Office spokesman, to whom the hon. Member has referred, is bombarded by questions from representatives of the Press, the B.B.C. and other media. The Press seems to like it, and, on balance, I think that it is a good thing.

Mr. Yates: In view of the fact that one of the eight spokesmen has made statements in respect of matters the accuracy of which I understand hon. Members are unable to verify by way of Questions, does not this establish a very serious precedent? That would appear to be the case if Press spokesmen of Government Departments are entitled to make statements which hon. Members cannot question with any expectation of an answer.

Commander Noble: Hon. Members have full opportunities of questioning.

Mr. H. Morrison: As one who knows what happens at Foreign Office Press conferences, I am always amazed that the spokesmen do not get into more trouble than they do. I think that they are very clever at keeping clear of trouble. In the circumstances of this case, have Mr. Randolph Churchill and the Daily

Express made a contribution towards the Government expense of running the News Department of the Foreign Office, in view of the first-class publicity that the Foreign Office has given to the newspaper and its contributor?

Commander Noble: I am most grateful to the right hon. Member for the first part of his statement.

Mr. Bevan: In view of the paucity of the information and the fact that we get nothing at all from the right hon. and gallant Gentleman, will he consider inviting hon. Members to these Press conferences?

Commander Noble: No doubt they could attend, representing any newspaper they may work for.

Oral Answers to Questions — GENEVA CONFERENCES (NUCLEAR TESTS AND SURPRISE ATTACKS)

Mr. A. Henderson: asked the Secretary of State for Foreign Affairs whether he will make a statement on the progress made at the Geneva Conferences on the discontinuance of nuclear tests and safeguards against surprise attacks, respectively.

Mr. Swingler: asked the Secretary of State for Foreign Affairs what progress has been made at the Geneva Conference on the discontinuance of nuclear tests.

Commander Noble: As regards the Conference on the Discontinuance of Nuclear Weapons Tests, some further progress has been made since my right hon. and learned Friend informed the House on this subject on 4th December, and the first three Articles of a draft treaty have been agreed.
The Conference on Measures against Surprise Attack has not so far reached any agreement, although extensive discussions have taken place. It is expected that an agreed statement will be issued on the position in the near future.

Mr. Henderson: Can the Minister throw any light on the reasons why the Conference on Measures against Surprise Attacks has resulted in a deadlock?

Commander Noble: I do not wish to say anything on this matter in view of the statement which will be made in the near future.

Mr. Bevan: The Minister has informed the House that agreement has been reached under three heads at the first of the conferences. In the event of agreement not being reached about the other matters, do I understand that the parties concerned would be prepared to sign this?

Commander Noble: I have nothing to add to what my right hon. and learned Friend said in his intervention in the right hon. Gentleman's speech in the last debate.

Mr. Bevan: A great deal of public interest has been taken in this matter, because then we were left in doubt about whether in fact the conference might be rendered abortive because of a failure of agreement on a wide measure of disarmament. If agreement cannot be reached there, will the other document be signed?

Commander Noble: As my right hon. and learned Friend said, this is a negotiation and we are not prepared to make our position clear at this moment. I fully agree with the right hon. Gentleman that this is a most important matter and that there is great public interest in it.

Mr. Swingler: Is the right hon. and gallant Gentleman aware that progress made at the nuclear test conference is very much to be welcomed? May I ask whether it is now the position that all the Governments concerned in the negotiations have expressed willingness to make an agreement for the complete cessation of tests provided a satisfactory control apparatus is established? Is that now the position?

Commander Noble: As I said just now, the position is that three articles of the treaty have been agreed—one on the discontinuance of tests, one on control and one on machinery. But the hon. Member will realise that there is a very great deal of detail to be filled in before there is a complete agreement.

Oral Answers to Questions — WORLD SECURITY AUTHORITY

Mr. E. L. Mallalieu: asked the Secretary of State for Foreign Affairs what are the necessary conditions of international confidence which would enable him to propose at the United

Nations a commission to study the transfer of armaments to a World Security Authority.

Commander Noble: Before we could consider advancing any such proposal, there would need to be a relaxation of international tension and substantial progress in measures of disarmament.

Mr. Mallalieu: Would not the right hon. and gallant Gentleman agree that there is unlikely to be any security felt at any international conference until there is a Security Authority? Would not he take some steps to set about the creation of such an authority?

Commander Noble: I do not think that any country would be able to support an organisation like that unless it felt greater confidence and greater security from some steps in disarmament.

Oral Answers to Questions — CENTRAL EUROPE (PLANS)

Mr. Swingler: asked the Secretary of State for Foreign Affairs if he will publish a White Paper on the various proposals for disengagement in Central Europe which have been received by him from European Governments since Sir Anthony Eden's plan in 1955.

Commander Noble: I think the honourable Member will find that most of these proposals have already been published in White Papers or elsewhere. If he has any difficulty in finding the texts of any of the proposals which he has in mind, I should be glad to advise him where they may be found.

Mr. Swingler: As this is now a very important matter for study and about the most hopeful prospect for international agreement, would not it be convenient for hon. Members to have a White Paper to study the series of plans which have appeared since the plan put forward by Sir Anthony Eden for a zone of disengagement in 1955? if we had such a White Paper, might it not be possible to find out the attitude of Her Majesty's Government at the moment to the prospect of disengagement? May I have an answer?

Commander Noble: I have nothing to add to my first answer.

Oral Answers to Questions — ISRAEL-SYRIAN BORDER (INCIDENTS)

Mr. A. Henderson: asked the Secretary of State for Foreign Affairs whether he will make a statement on the situation on the Israel-Syrian borders; and to what extent United Nations observers are stationed along this border.

Mr. Janner: asked the Secretary of State for Foreign Affairs what is the present position on the Israel-Syrian borders; and what steps are being taken by the United Nations to prevent future attacks by Syria on persons and property in Israel.

Commander Noble: In a letter to the President of the Security Council on 4th December, the Government of Israel asked for an urgent meeting of the Council to consider an alleged act of aggression in which a number of Israel villages were bombarded on 3rd December by Syrian artillery. The Security Council began its consideration of this complaint on 8th December and will be continuing it later today. I would therefore prefer not to comment at this stage.
Since August, 1957, a limited number of permanent United Nations observer posts have been established on both sides of the sector of the frontier in question. There is one such post on either side of the frontier in the area where the shelling on 3rd December took place, and one United Nations observer is reported to have been slightly wounded.

Mr. Janner: In view of the serious implications of these aggressive acts on the part of the Syrians in regard to peace in the Middle East, will the Minister do everything possible to see that they are stopped?

Commander Noble: As the Security Council is probably meeting today, I do not think I should make any further statement.

Oral Answers to Questions — CUBA (SHIPMENT OF ARMS)

Mr. Delargy: asked the Secretary of State for Foreign Affairs what authorisation he has given for the supply of rockets to the Government of Cuba.

Commander Noble: As my right hon. and learned Friend explained to the hon. Member on 19th November, the sale of

seventeen Sea Fury aircraft to the Cuban Government was authorised some months ago. These aircraft are equipped to carry rockets and a normal complement for each aircraft was authorised in the usual way.

Mr. Delargy: Having already prized from the Foreign Secretary the terrible information that British tanks and planes are being used by the Cuban dictator to kill citizens of Cuba, may I now ask the right hon. and gallant Gentleman whether he is aware that at this moment there is a ship, the "Sarmiento," lying in a British port loaded with more than 100 tons of rockets to be dispatched at any moment to the Cuban dictator? Will the right hon. and gallant Gentleman assure the House that this cargo will not leave these shores until, at the very least, the British Parliament has been given the fullest information about it, because so far this dirty deal has been done behind the backs of the British people and of Parliament.

Mr. Hale: And a very dirty deal indeed.

Commander Noble: I strongly resent the imputation in the hon. Member's question.

Mr. Hale: You ought to be ashamed of yourself.

Commander Noble: At the time the sales were approved there was no evidence that the insurgent elements in Cuba had more than a limited measure of support in some parts of the Eastern Provinces of Cuba. I will certainly look into what the hon. Gentleman said about a ship lying in a British port. My information is that all these missiles have been delivered.

Mr. Bevan: Will the right hon. and gallant Gentleman give an assurance that this ship will not be allowed to sail? We understood from the last reply given by the Foreign Secretary on this matter that his information would lead him to suppose—or rather he anticipated—that we ought not to send any further military help.

Commander Noble: As I have said, I will look into the matter, but I will give no such assurance.

Mr. Delargy: On a point of order, Mr. Speaker. I am in some difficulty at this late period of the Session. This answer I consider quite unsatisfactory. You may


recollect that in order to draw the attention of the House to this sad and sordid traffic in arms I endeavoured to speak on the subject during the series of Christmas Adjournment debates. You decided that certain questions, like Scottish horticulture, were much more grave and urgent than the shooting of Cuban citizens with British guns. Does not this throw a peculiar light on your commonsense and responsibility?

Hon. Members: Oh.

Mr. Speaker: Order. Naturally, the hon. Member is disappointed that his subject was not chosen for debate, but I cannot help that. I make the best selection I can of the most important subjects, and the hon. Member has no right whatever to cast imputations on the Chair.

Mr. Delargy: Further to that point of order. If any impartial persons considered the subjects you have chosen, my grave allegation would be justified.

Mr. Speaker: Order. If the hon. Member wishes to pursue that matter he must put down a Motion in the proper way.

Mr. Delargy: May I ask a question about the Motion? I am all in favour of putting down such a Motion. But since this Motion cannot now be discussed before the end of January, by which time, no doubt, hundreds more Cubans will have been killed, is not your advice frivolous?

Mr. Speaker: I meant that if the hon. Member disagrees with the way in which I perform my difficult task of selecting subjects for the Adjournment debates and wishes to criticise the Chair he must do so by putting down a Motion—

Mr. Delargy: It cannot be debated in time.

Mr. Speaker: —and not do so now.

Mr. Hale: On a point of order. Would it be in order to move the Adjournment of the House under Standing Order No. 9 to call attention to a definite matter of urgent public importance, namely, the failure of Her Majesty's Government to give an assurance that no further weapons will be exported from this country to support the establishment of a dictatorship in Cuba?

Mr. Speaker: That would not be within the Standing Order.

Mr. Hale: This is the first occasion in the history of this House when Mr. Speaker has given a Ruling of that kind without giving some reason for it.

Hon. Members: Order.

Mr. Hale: I am in order and I raised a point of order to call attention to the fact, which I assert to be true, that never before in the history of this House has an application to move the Adjournment of the House under Standing Order No 9—

Mr. Speaker: I would point out to the hon. Member that this is not the time to make proposals for raising matters under Standing Order No. 9. He should wait until the end of Questions.

Mr. Hale: It was my intention when I rose to move a Motion at 3.30 and to ask whether it would be in order to do so at 3.30.

Mr. Speaker: The hon. Gentleman cannot do it now.

Oral Answers to Questions — UNITED STATES AND IRAN (AGREEMENT)

Mr. Bevan: asked the Secretary of State for Foreign Affairs to what extent joint consultations have taken place between the Governments of the United States of America and Iran, on the one hand, and Her Majesty's Government, on the other, with regard to the proposed military agreement between the United States of America and bran and its effect on the arrangements of the Bagdad Pact.

Commander Noble: At the meeting of the Ministerial Council of the Bagdad Pact in London last July, the United States Government agreed to co-operate with the member countries taking part for their security and defence and, announced that they would enter into agreements designed to give effect to this co-operation. Negotiations on such an, agreement are in progress between the Iranian and the United States Governments. The conclusion of this agreement will strengthen the Bagdad Pact, and Her Majesty's Government welcome it. The terms of the agreement are, however, at matter entirely for negotiation betweent the Iranian and United States Governments.

Mr. Bevan: Are the terms of the agreement conveyed to Her Majesty's Government as they are being negotiated?

Commander Noble: We have been generally informed of the negotiations, but there has been no actual consultation.

Mr. Bevan: Does not the right hon. and gallant Gentleman think that the establishment of a missile base in Iran will be regarded as anything else than an act of provocation? Would it not be much better for peace in this area if some of the £80 million received in oil royalties were spent on the people of Iran, and not push the northern tier right up to the frontiers of Russia like this? What advantage can be got from this ridiculous provocative behaviour?

Commander Noble: This is a defensive organisation, as are the other organisations to which we and our allies the United States belong.

Oral Answers to Questions — GOVERNMENT INFORMATION SERVICES

Document

Mr. D. Howell: asked the Chancellor of the Duchy of Lancaster (1) which Government Department published the official two-page document, entitled "Transport at Elections, Origin of Section 88"; and why its distribution by an employee of the Conservative Central Office was authorised;

(2) whether he is satisfied that the document published by his Department, entitled "Transport at Elections, Origin of Section 88", was drafted in accordance with the usual practice designed to maintain the impartiality of Government Departments.

The Chancellor of the Duchy of Lancaster (Dr. Charles Hill): The document was a background note prepared by me for Parliamentary journalists and made available to them in answer to questions some of them had asked. It was factual, objective and accurate.

Mr. Howell: Is it not rather reprehensible that a document prepared by the Minister, and now admitted to be prepared by him, should bear no sign of its ownership or authorship? Is not the language in which it is couched partisan language

which we normally accept in political warfare but not the sort of language to be used in everyday Government publications?
Is it not remarkable that two documents were issued about this matter on the same day? One is from the Home Office on 29th October, which is a perfectly proper document setting out the aims of the Bill, whatever we may feel about it, and the other document, issued by the right hon. Gentleman at the same time, is full of political innuendo and couched in language not normally used in this House but common to party political warfare. The second document was distributed not through Government agencies but by an employee of the Conservative Central Office, who is also a member of the Press Gallery. Does not this show that the right hon. Gentleman's position is synonymous with the Conservative Central Office, and is not that an abuse of Government?

Dr. Hill:: I will take the questions in turn. This document was in answer to questions asked by Parliamentary journalists as to what was the electoral background to the statement made in this House that the party opposite, when in Government, had broken the terms of the Conference on Electoral Reform. This was a factual document answering those questions and to be made available to those Parliamentary journalists who wanted it. If the facts tell an unacceptable story, I cannot help it.
On the second point, as to its distribution, this was prepared, as I have said, to be available to those who wanted it. As I could not be in the Lobby that day, I asked the Parliamentary liaison officer in question to make it available to any interested. Thirdly, on the question of its partisan character, it is true that I refer to the former Government as a Socialist Government, but that was in the highest interest of accuracy.

Mr. Gordon-Walker: Can the right hon. Gentleman say whether it is common practice for his Department to produce a document for circulation to the Press which bears no indication of either the place or source of origin, and if it is common practice for such documents to be distributed by officials of the Conservative Central Office?

Dr. Hill:: This document was prepared by me to be handed to those who were interested, I have answered the second part of the supplementary question.

Mr. H. Morrison: Is the right hon. Gentleman aware that there are official avenues whereby Government communications can be handed to the Press in this House or elsewhere which have been used by past Governments? I know the machinery well. Will he please understand that it is really most objectionable that a Minister should use a party organisation for an official purpose in distributing Government information? We had it in the case of the Prime Minister, when he was Minister of Housing and Local Government. in connection with the pamphlet about housing, and we have had it since. Will he please understand that it is a denigration of the standards of public administration that official machinery of Government should be used by a party organisation for the purpose of distributing information? It has plenty of opportunities of its own.

Dr. Hill:: I reject the right hon. Gentleman's allegation. This was an objective document which the party opposite does not like. It is odd that such an allegation should come from a party which, when in Government, employed as its spokesman, on public funds, a Socialist propagandist. the former editor of the Daily Herald.

Mr. H. Morrison: If the right hon. Gentleman now repudiates the doctrine which I put to him, it means that he confirms that this Government reserve completely the right to mix their official machine up with the political party organisation? I very much hope that my right hon. Friends on the Front Bench will find an opportunity, either now or after the Recess, to raise this matter as an issue of great public importance.

Dr. Hill:: I do not reject the doctrine; I sustain the doctrine.

Mr. Howell: In view of the fact that the Minister has not even had the decency to apologise or to give any undertaking as to the future, and even now is not willing to stop publishing anonymous documents of this character, I beg to give notice that I will raise this matter on the Adjournment.

Mr. Dudley Williams: On a point of order. The hon. Member for Birmingham, All Saints (Mr. D. Howell), in a reference to my right hon. Friend the Chancellor of the Duchy of Lancaster, has said that my right hon. Friend has not even had the decency to apologise. Is that a right and proper remark, Sir?

Mr. Speaker: I think it was an expression of heat, but I cannot say that it was out of order.

CUBA (SHIPMENT OF ARMS)

Mr. Delargy: I beg to ask leave to move the adjournment of the House, under Standing Order No. 9, to call attention to a definite matter of urgent public importance, namely,
the refusal of the Government to prohibit a shipment of rockets from Great Britain to Cuba.

Mr. Speaker: The hon. Member for Thurrock (Mr. Delargy) asks leave to move the Adjournment of the House under Standing Order No. 9 to call attention to a definite matter of urgent public importance, namely, the refusal of the Government to prohibit a shipment of rockets from Great Britain to Cuba.
I cannot find that within the Standing Order. The hon. Member for Thurrock, in the course of a supplementary question, mentioned something about a ship that was loaded with rockets and about to leave these shores. On the other hand, the Minister who was answering for the Foreign Office said that he understood that all the shipments for Cuba had already gone. That was controverted. Further pressed, he said he would look into it. It is one of the rules about the application of Standing Order No. 9 that the House must proceed upon a definite matter, not one in which the facts are in dispute or not ascertained. Therefore, I cannot find this within the Standing Order.

Mr. Bevan: There was a statement of a very definite kind by the Minister of State in answer to a supplementary question by me. I asked shim whether he would give an undertaking that if the ship, loaded with rockets for Cuba, was about to leave it would be stopped, and the Minister refused to give an undertaking. That is a definite fact. If there is such a ship and it is about to sail, we


have not received from the Government any undertaking that the ship will be stopped.

Mr. Speaker: I rather think that the position is really this: The Minister did say that so far as he knew all the arms had been supplied. Then the right hon. Member for Ebbw Vale (Mr. Bevan) asked him whether the facts were otherwise, whether the ship was going to sail, and, if so, would he stop it. We do not know about the ship yet; and in so far as that was concerned it was hypothetical, on the basis that the ship might be in existence and might be going to sail. I do not think that it is a definite matter Within the meaning of the Standing Order.

Mr. Bevan: What is not hypothetical, Sir, is the position of the Government, who will not give an undertaking to stop the shipment of arms to Cuba. That is the point that my hon. Friend the Member for Thurrock (Mr. Delargy) is now raising and is what I raised earlier. Is it not surprising, in view of the fact that other nations have stopped sending arms to Cuba—[An HON.MEMBER: "Including America."]—including the United States, that we are in this position? If we can have an undertaking from the Government at this moment to take steps to see that no further arms are shipped from this country, the whole matter will end. In my respectful submission, it will be an abuse of the privileges of the House if, after the discussion today, we discover tomorrow morning that this evening the ship sailed and we could not then bring it back?

Mr. Speaker: If that were so I have no doubt that the House would know how to deal with an abuse of its privileges. The original Question put upon the Order Paper by the hon. Member for Thurrock was
To ask the Secretary of State for Foreign Affairs what authorisation he has given for the supply of rockets to the Government of Cuba.
That was answered in terms—I do not remember the words—to the effect that authorisation was given some time ago, in the usual way. Then, when pressed about future developments, the Minister said that the supplies had all gone and there were no more. That is what I understood. He was challenged on that,

and he said he would look into it. The facts are not before the House, and I really could not find that Motion as coming within the Standing Order.

Mr. Bevan: On a point of order. You have not answered my question, Sir, that what is before the House is the definite refusal of the Government to take steps to prevent any further shipment of arms to Cuba. That is not hypothetical or vague and it might be extremely urgent. We are in possession of sufficient information from the Government, I respectfully submit, to enable the Adjournment of the House to be moved under Standing Order No. 9.

Mr. Speaker: I think not. It has frequently been ruled in the past that the fact that a Minister refuses to give a certain assurance or answer is not a matter that can be raised under the Standing Order. There is a long line of precedents. When the Minister disputes that more arms are going I do not see that the House is possessed of the facts. The refusal of the Minister to give an assurance when the request was put to him like that in a supplementary question is not a matter for the Standing Order.

Mr. Hale: I beg to ask leave to move the Adjournment of the House on a definite matter of urgent public importance. namely,
the failure of Her Majesty's Government to secure that no further tanks, aircraft and other offensive weapons shall be exported to assist the establishment and maintenance of a dictatorship in Cuba.
I think that I am entitled briefly to submit my reasons, Sir. The Minister of State made it clear that he was not prepared to give the House an undertaking that he would conform to our obligations under the United Nations and that he would not take part in any operations which are virtually assisting the establishment of a dictatorship in the island of Cuba and which would easily embroil us in a situation of such gravity that no one would be able to predict with any certainty how far they might lead us. The Minister is doing that when the House is contemplating adjourning for a Recess to celebrate peace and good will on earth.
This Motion is precisely within the terms of many Rulings under Standing


Order No. 9. It is beyond any question a definite matter and an urgent matter and I suggest that it is impossible for you to rule that such a proposal is not of very great public importance indeed. The Motion was originally written out in these terms, and I have it here, Mr. Speaker.

Mr. Speaker: The hon. Member for Oldham, West (Mr. Hale) asks leave to move the Adjournment of the House under Standing Order No. 9 to call attention to a definite matter of urgent public importance, namely, the failure of Her Majesty's Government to secure that no further tanks, aircraft and other offensive weapons shall be exported to assist the establishment and maintenance of a dictatorship in Cuba.
For the reason I have given, I cannot find that in line with the Standing Order. Here the facts are as follows. The original Question of the hon. Member for Thurrock on the Order Paper did not ask for any such assurance. The hon. Member said that more arms were going. The impression of the Minister of State was to the contrary, but he said he would inquire. Therefore, the House is not proceeding upon an agreed basis of facts that other arms are going. If the Government had had the facts in their minds and were sure of them and had said aye or nay, that might be a different matter, but I do not think that the fact the Government do not give an assurance straight away on matters which are in doubt, without looking into it, can be made a ground for moving the Adjournment under the Standing Order.
Hon. Members have to be reasonable about this. The House must proceed on a basis of fact which is agreed. We do not know whether more arms are going. We do not know anything definite on this subject at all.

Mr. Delargy: This matter is as urgent as this, Sir. As recently as last Friday 180 Cuban rebels—so-called—were either killed or wounded chiefly by arms supplied by this country. The others have now taken refuge in the mountains and the dictator is badly in need of these rockets to destroy them as soon as he can. An all-out offensive is to be launched next week, chiefly with the aid of British arms. This is something which, so far, has been unknown to British

people or to the British Parliament. I am convinced that if the British people knew about it they would strongly disapprove. That is why I said that this deal is being done behind their backs. It is very serious, exceedingly urgent, and is certainly of public importance.

Mr. Speaker: The hon. Member has made an interesting statement about the war in Cuba, but we are not in possession of the facts; the matter is not agreed. I think that before we can apply the Standing Order of the House must proceed on a basis of agreed facts, something definite.

Mr. Hale: Further to that point of order. I submit to you. Sir, that to base your judgment on anything in the original Question is irrelevant to the question that we are discussing. We are discussing the Answer given by the Minister of State, who said that he did not know, that it was not clear, that the dictatorship was being established and there was something of a state of civil war.
Now the right hon. and gallant Gentleman knows that, I respectfully suggest to you that that gives us the right to demand at once, as a definite matter and as one of grave urgency, an undertaking from Her Majesty's Government that they will at once give instructions to cease this wicked deed, and that, unless they are prepared to do that, we are entitled to demand the adjournment of the House in order to press the Government for such an undertaking.
You will recall that this sort of thing has a long history, dating back to the "Alabama" and that that case brought us near to war with the United States. It is difficult to suggest that this is not a matter of urgent importance about which we should take steps at once.

Mr. Speaker: So far as I can recollect, the answer of the Minister of State was that he did not know these facts, that more arms were going.

The Minister of State for Foreign Affairs (Commander Allan Noble): In one of my supplementary answers I said my information was that these missiles—these rockets—had been sent. I have now checked and my information is that the last of a consignment of rockets for which export licences were approved left on 3rd November. I have no knowledge of any


others and I should welcome details in order to check whether the new consignment to which the hon. Member for Thurrock (Mr. Delargy) referred has an export licence. I will give the assurance that no further missiles of this type will be sent without informing the House.

Mr. Bevan: Would the right hon. and gallant Gentleman consider that last sentence again? We want an assurance from him—and then this unhappy incident can close at once—that no weapon of any sort will be sent from Great Britain to Cuba.

Commander Noble: I will give an assurance that no further weapons of any sort will be sent without informing the House of Commons.

BUSINESS OF THE HOUSE

The Secretary of State for the Home Department and Lord Privy Seal (Mr. R. A. Butler): The Government have been considering the Report from the Select Committee on the Obscene Publications Bill, presented by my noble Friend the Member for Berwick-upon-Tweed (Viscount Lambton) and the Bill which the hon. Member for Stechford (Mr. Roy Jenkins) subsequently obtained leave to bring in.
As there is reason to believe that the business announced for tomorrow will not occupy the whole of the sitting, we propose to afford an opportunity to debate a Government Motion to take note of the Select Committee's Report, which will enable the House to express its views on the issues involved.
This should be a valuable use of our time since there might well be little opportunity for the Bill now before the House to be fully debated on Second Reading on any of the Fridays set apart for Private Members' Bills.

Mr. Roy Jenkins: Will the right hon. Gentleman bear in mind that although some hon. Members might be inclined to attribute this change to the fact that Sir Alan Herbert has stated that he is to take part in the Harrow, East by-election, there will be others who will attribute it to the interest of the Home Secretary in the matter? Is he aware that we welcome the opportunity for a debate

so that those hon. Members who did not oppose my application for leave to bring in the Bill under the Ten Minutes rule, but opposed it anonymously on Second Reading, may give their reasons for opposing? If the opinion of the House tomorrow is in favour of legislation, will the Government proceed with early action on this matter?

Mr. Butler: What the Government have reflected, in coming to this decision, is that there is an opportunity for debate. Otherwise, I do not see one for a long time ahead. The House has received a Report from its own Select Committee on the subject and I do not see an early opportunity for the hon. Member's Bill at present. Therefore, I think the House should have an opportunity of expressing its views on the subject.
In relation to the extraneous question the hon. Member raised, I think that the relevance of that depends on the attention of the House to the attitude of the Government towards the Bill, which is a very complicated Measure. I shall certainly attempt, when I speak, to put forward a constructive attitude, but what effect that may have on outside feeling I do not know yet. This is a difficult question and has two sides to it. I will, however, take the opportunity of expressing the view of the Government on the Report of the Select Committee and hone that we shall have an opportunity of making progress in this difficult matter.

Mr. Crossman: May I ask when it is proposed to take the Motion for the Adjournment for the Christmas Recess?

Mr. Butler: We propose to do that on Wednesday.

Mr. Crossman: Is it not a fact that there was an understanding through the usual channels to take that Motion on Tuseday? Are there not very interesting reasons why the Government are afraid of taking it tomorrow, hut are postponing it until Wednesday?

Mr. Butler: No, Sir. The facts are that, through the usual channels, I understood that our first notification was that we might take it on Tuesday, but now we propose to take this business—to which I attach great importance and in which I think the House is interested. It has always been reasonable, and has


established precedent behind it, to take the Motion for the dates of the Christmas Recess on the day before the actual end of this part of the Session. Therefore, we shall be following the normal practice. We have informed the Opposition and we are not aware that there is any objection on the part of the Opposition to taking the action we suggest.

Mr. Wigg: Is it not a fact, Mr. Speaker, that I gave notice to ask for permission to raise the question of Suez and the Keightley dispatches in the Adjournment debate, but withdrew that notice and gave notice that I should raise the matter on Tuesday? Despite the Prime Minister's brave words last week about the grand inquest of the nation, is it not a fact that between then and today the Leader of the House has got cold feet and has deliberately and clearly manipulated the business of the House to prevent what he thinks an adequate discussion of Suez and the Keightley dispatches?

Mr. Speaker: I cannot answer that question.

Mr. Gaitskell: Is the Leader of the House aware that he is quite in error in supposing that the Opposition raises no objection to the proposed change in business? On the contrary, my hon. Friends have made it clear, through the usual channels, that we did not like this change, not only for the reasons that my hon. Friends have given today, but because we were anxious to have the fullest possible time for the debate on unemployment?

Mr. Butler: I am always very glad to work with the right hon. Gentleman through the usual channels. I hesitate to deny anything he says, because it upsets the integrity of the usual channels; but I can only say that, on the information given to me, I understood that there was no objection. [HON. MEMBERS: "No."] If there was, I can only say that that was not the information given to me. If there was an objection, then we must note it and accept it, to restore the integrity of the usual channels. In so far as I was given the information, I can only say what I was told.

Mr. Crossman: May we ask the Leader of the House whether, if there has been a misunderstanding, he will put the Adjournment Motion back where it was

on Tuesday so that the debate may take place?

Mr. Butler: I must say that the one thing I was not aware of was that the hon. Member for Dudley (Mr. Wigg) had any understanding at all or contact with you, Mr. Speaker, on the subject of a debate on Suez and the Keightley despatches. I was not aware of that. If the hon. Member has been crowded out of an opportunity, I am very sorry, but I will say, also, that I do not think that the Motion for the Christmas Adjournment is particularly appropriate for a discussion of the sort that he envisages on Suez and the Keightley despatches.

Mr. Gaitskell: In view of the misunderstanding which has evidently occurred on this, and the fact that there has been no agreement between the two sides of the House, will the Leader of the House undertake to discuss the matter through the usual channels and see whether we can go back to the original arrangement?

Mr. Butler: I do not think that we can go back on this now—[HON. MEMBERS: "Why not?"]—because we have made an announcement about the business we propose to take and which. I think, appeals to the House as a whole, namely, to discuss the Report of its own Select Committee. There can be no refusal of a suggestion that the matter be discussed through the usual channels—we can certainly continue to discuss— but I do not anticipate that the Government will change their mind.

Mr. Emrys Hughes: Will the Leader of the House tell us whether his anxiety to discuss the matter of obscene publications arises from his desire to give us an opportunity to discuss the articles of Mr. Randolph Churchill?

Mr. Butler: I had expected that the hon. Gentleman would put that supplementary question. It comes very readily to mind, but it lies very much more easily in his mouth than in mine.

Mr. Wigg: Is the right hon. Gentleman not aware that not only did I communicate with you, Mr. Speaker, but I went to see the Leader of the House and wrote to him as well? What more does the right hon. Gentleman want? Is it not plain that the Government have gone out of their way to alter business tomorrow to


avoid what they imagine to be a rather difficult subject? May I tell the right hon. Gentleman that he has not succeeded? I hope, therefore, that we shall have an opportunity, for at least a brief period, of discussing the matter on Wednesday.

Mr. Butler: That is precisely what I should not wish to stop the hon. Gentleman doing. The procedure of the House, in so far as debate is on the Motion for the Adjournment, is in the hands of Mr. Speaker and hon. Members themselves. If hon. Members are in order in discussing a matter like this, when the Motion is moved, it is far from the wish of the Government to stop them. There is no intention of trying to stop them.

Mr. Gaitskell: What concerns us is the most convenient way of organising our business. Is it not possible that, on examination, we shall find that, even including discussion on the Report of the Select Committee on Obscene Publications, it may be more convenient to take the Motion for the Christmas Adjournment on Tuesday rather than on Wednesday, when we shall, in any event, have an extremely important debate?

Mr. Butler: As I say, there is no question of avoiding any request made by the Leader of the Opposition for a discussion, through the usual channels—no question at all—because we could not possibly operate our business if there were a stoppage of that sort, and I should not wish to see it. It is something which may be discussed, but all I can say is that I do not hold out great hope of the Government altering their mind.

Mr. V. Yates: Does not the Leader of the House consider that it is rather disgraceful that the Government should suddenly come to the view that the House will not take a great deal of time on a subject when there are many of us on this side who are anxious to raise matters in debates and cannot be called because there are too many of us wishing to do so? I refer to issues like unemployment, which affects almost every constituency. Is it not totally unsatisfactory? Should there not be a better arrangement of the business of the House?

Mr. Butler: I do not think that there is anything remarkable about this. The business for Tuesday is the Emergency Laws (Repeal) Bill, dealing with economic controls, and four consolidation Measures. That looks quite a lot, but, on examination, it appears that there is a good chance of debating this other important subject before the Recess.
As regards precedents for moving the Adjournment Motion, nearly all the precedents for many years back, as far as I can see, are that the Government should move the Motion on the day before the Adjournment for the Christmas Recess. Therefore, I do not think that we are doing anything out of the ordinary.

Mr. Short: Mr. Speaker, do you recall that one of my hon. Friends from the North-East and I applied to you for time for an Adjournment debate on Thursday on unemployment in the North-East? We have not been given that time, presumably because there is to be a debate on unemployment on Wednesday. Is it not obvious that every single minute of the debate on Wednesday will be vitally important for the whole country, and, therefore, is it not monstrous that this important debate should be eaten into by this other quite unimportant matter?

Sir G. Nicholson: Will you enlighten the House, Mr. Speaker? Surely the Motion for the Adjournment for a Recess cannot be debated in very wide terms. Is it the sort of debate where one can raise anything? Is it not fairly restricted?

Mr. Speaker: The usual Motion is in the form "That this House, at its rising Tomorrow, do adjourn until" whatever the date be. That is a debatable Motion, and hon. Members are entitled to advance any argument which is relevant to the plea that the House should not adjourn tomorrow, or that it should come back earlier because of the importance of matters which should be discussed. In the past, we have had such debates, and I must say that I have always found them hard to keep strictly relevant, because hon. Members, in urging the importance of a subject as a reason for not adjourning, have tended to elaborate the subject a great deal and, really, make a speech on the subject itself rather than on the Motion. But I must do my best


It is certainly a debatable Motion, and any hon. Member is entitled to rise in his place and advance reasons why we should not adjourn for the length of time specified in the Motion.

Mr. Swingler: I understood the Leader of the House to say that he did not know that my hon. Friend the Member for Dudley (Mr. Wigg) wished to raise the subject of Suez on the Motion for the Christmas adjournment. I understood my hon. Friend to assert that he had notified the Leader of the House of his desire to do that. May we have an explanation of that? As the matter has now been revealed on the Floor of the House, it is surely a relevant consideration to he taken into account by the usual channels. Should not the whole matter be reopened, now that the Leader of the House is aware of the demand from a considerable number of hon. Members to discuss the subject during the debate on the Motion for the Christmas Adjournment?

Mr. Wigg: Before the right hon. Gentleman replies, may I say that there is a slight inaccuracy in what I said? I mentioned three occasions, but there were, in fact, four. When the Prime Minister made his statement last week. I then gave notice that I would try to raise the matter on the Adjournment. I saw you, Mr. Speaker, I saw the Leader of the House, arid I wrote to the Leader of the House as well.

Mr. Butler: I will check immediately I have spoken, but, as far as I am aware. I have not had a letter from the hon. Member for Dudley (Mr. Wigg), though I may get it afterwards.

Mr. Wigg: I saw the right hon. Gentleman as well.

Mr. Butler: The hon. Member for Dudley saw me at about a quarter past three this afternoon, before I came into the Chamber. I told him and the hon. Member for Coventry, East (Mr. Crossman) of the exact announcement I was going to make about the Obscene Publications Bill.
In answer to the hon. Gentleman the Member for Newcastle-under-Lyme (Mr. Swingler), I think that the record is quite clear. The point about which I was not aware was that there had been any attempt made by the hon. Member for Dudley to secure a period in the time you

allocate, Mr. Speaker, for the business on the Adjournment, that is to say, the Adjournment debates.
I think that the hon. Member for Dudley feels somewhat aggrieved because he feels that he has not been able to get time on the Adjournment, that is, in Mr. Speaker's time, and he has not got any very good opportunity of raising it himself. Of that difficulty, I was not aware.

Mr. Grimond: May I now ask where we stand? The business tomorrow is altered, as the result, apparently, of a misunderstanding. There was no agreement to alter our business. I may be wrong, but that is what we have been told. Further, the hon. Member for Dudley (Mr. Wigg) is under the impression that he has given up a debate on Thursday for the sake of a debate tomorrow. We are now told by the Leader of the House that he may reconsider the debate tomorrow. First, may I ask the right hon. Gentleman whether he will restore the Adjournment debate tomorrow, and, secondly, if he does not do so, may we know what the business tomorrow is to be?

Mr. Butler: I had no previous opportunity of announcing tomorrow's business, and, as I told the Leader of the Opposition, I do not see any great chance of the Government's changing their mind. [HON. MEMBERS: "Why?"] Further-more, this decision to give an opportunity for a debate on the Obscene Publications Bill arose after consideration of the business on Friday last, when it appeared that the Bill of the hon. Member for Stechford (Mr. Roy Jenkins) was being objected to. As there was no further opportunity for this discussion, I thought it reasonable— and the Government are of the same opinion—that we should have a debate on the subject in the spare time on Tuesday, and so provide an opportunity to ventilate the important matter that the House could not discuss on Friday.

Mr. Gaitskell: I am not objecting to the discussion of the Report of the Select Committee on the Obscene Publications Bill, but I ask the Leader of the House whether he will not reconsider his attitude on this, whether, bearing in mind the business decided on for both Tuesday and Wednesday, including the Obscene Publications Bill, it would not be wiser to take the Motion for the Christmas Adjournment on Tuesday? I believe that that


would be for the convenience of hon. Members on both sides of the House and would enable us to discharge our business, while also providing an opportunity for many hon. Members to raise what, with your permission, Mr. Speaker, they are allowed to raise on the Motion for the Christmas Adjournment.

Mr. Butler: I cannot go further with the right hon. Gentleman than to accept his request that there should be a discussion on the subject.

Mr. Roy Jenkins: May I ask the right hon. Gentleman why, if this problem arose out of objection to the Obscene Publications Bill, he turned his mind to it on Friday, when, as far as I know, it was objected to by only one hon. Member, and not on the Friday two weeks ago when, I think, it was objected to by three hon. Members?

Mr. Butler: For the very good reason that we had a very crowded programme. [HON. MEMBERS: "Oh."] This is, in fact, the first possible gap that there has been for the discussion. It is quite clear that it is the first time, and the hon. Member for Stechford (Mr. Roy Jenkins) knows perfectly well that there has not been another opportunity which we could have afforded, in Government time, for the discussion of the Obscene Publications Bill. I prefer the hon. Member's previous interjection, when he seemed to show some appreciation of the fact that we are finding the first possible opportunity to discuss this matter.

Mr. J. Griffiths: Since the Leader of the House has arranged this debate for tomorrow afternoon because of what happened on Friday—and I was here on Friday, and the right hon. Gentleman was not—is he not aware that there were two Bills preceding that of my hon. Friend the Member for Stechford (Mr. Roy Jenkins)? One was the Workmen's Compensation and Benefit (Supplementation) Bill which dealt with the sufferings of many people now on workmen's compensation. We discussed that for an hour and a half, which Mr. Speaker thought, rightly, in my view, was adequate. There was also the National Insurance (Extension of Unemployment Benefit) Bill, which would have restored Section 62 of the 1946 Act, and would have made possible the payment of unemployment

benefit to the long-term unemployed without a means test. If, therefore, the right hon. Gentleman is anxious that tomorrow should be used to make up for time lost on matters not adequately considered on Friday, could he not consider those other two Bills?

Mr. Butler: What we are to do is to debate a Motion to take note of the Select Committee's Report. That is a matter that is long overdue, the Select Committee having reported on the Bill earlier in the year.

Mr. Griffiths: Are the Government now announcing that they regard that matter as being more important than the two other matters that I have just mentioned, and which affect so many people?

Mr. J. T. Price: Is it not an ironic fact, Mr. Speaker, that the Leader of the House should now upturn the business of the House to discuss obscene publications, which will have the effect of reducing the time that should be devoted to the greatest obscenity of modern times—the obscenity of unemployment?

Mrs. Braddock: Having listened to this cross-talk for about 20 minutes, Mr. Speaker, may I express my opinion to the Home Secretary? I am certain that the 4·5 per cent. of unemployed on Merseyside will believe that this is the most flagrant piece of sharp practice that has been committed by this Government in an attempt to prevent a discussion on unemployment on Wednesday.

Several Hon. Members: Several Hon. Members rose—

Mr. Speaker: Order. There has been a business statement, and questions must be relevant to that. If his question is relevant. I will call the hon. Member for Coventry, East (Mr. Crossman).

Mr. Crossman: Can the Leader of the House tell us where we now are about business; and whether he intends to go back to the sensible arrangement of taking the Motion for the Adjournment for the Christmas Recess on a day when there is a less important debate, and not crowd it into a day when there is a major debate?

Mr. Butler: The normal precedent for this is that the Government put down a Motion for the day before we adjourn. The decision of the Government will be indicated when we put down the Motion,


and the exchange for which the Leader of the Opposition has asked will take place before the Government put down the Motion.

Mr. Wigg: On a point of order, Mr. Speaker. Is the right hon. Gentleman's recollection correct? Did we have the Motion for the Adjournment for the Summer Recess on the day before we adjourned? My recollection is that it was on the day before that. But there are many precedents for the right hon. Gentleman to come to the House this evening at seven o'clock and tell us the business for tomorrow. That was done during the Suez crisis, and could be done again now.

Mr. Speaker: I do not think that that is the same question. I did not know anything about this exchange until I came to the House. Indeed, I did not know that the Motion was originally to be put down on Tuesday until the hon. Member for Dudley (Mr. Wigg) informed me. But there is nothing more to be done. I have heard the Leader of the House say that there is to be further discussion about this through the usual channels. I suggest that the House should now go on with its normal business, since there is so much to deal with.

Mr. Wigg: On a point of order, Mr. Speaker. Surely it is possible for the Leader of the House to come to the House later today and tell us what the business for tomorrow is to be. May we have your Ruling as to whether it would be permissible for him to tell us the business for tomorrow at seven o'clock this evening?

Mr. Speaker: I would have to think of some means as to how that could be brought into order. At times of great importance, I have known business to be interrupted by a statement, but I am against it, as a rule. It might be done at the end of the day, quite conveniently.

Mr. Wigg: Further to that point of order. Perhaps I could help the Chair in this matter, Sir. As there seems to be some doubt in your mind, Mr. Speaker, would it be of help to you if I went out now, did some research and returned with 10 precedents?

Mr. Speaker: I do not think that it would. I remember some of them my

self. I would have to see, first, what was the actual situation with which I was confronted. I will have to go by that if someone asks leave to make a statement on business.

Mr. Butler: I have just received the letter from the hon. Member for Dudley (Mr. Wigg), and I have been informed that I have his permission to read it. He says that on Tuesday, the 16th, he hopes that
…we shall have an opportunity to raise the subject of Suez and General Keightley's despatches. If, however, this opportunity does not occur, we shall endeavour to raise the subject on Wednesday, the 17th.
We are giving you this notice personally as, on the 20th of December, 1956, complaint was made that notice was not given.
We hope, of course, that you will make arrangements for a reply to be made.
That is signed by the hon. Member for Dudley, and the hon Member for Coventry, East (Mr. Crossman).
That would be exactly the position; if there were not an opportunity tomorrow, there would be an opportunity on Wednesday.

Mr. Cooper: Is it not a fact, Mr. Speaker, that at this time we should be discussing the question of house purchase by people of limited means? That being so, is it not deplorable that right hon. and hon. Gentlemen opposite should seek to limit the time available for discussion of that important topic?

Mr. Wigg: Further to the point of order raised by the hon. Member for Ilford, South (Mr. Cooper). Is it not deplorable that Her Majesty's Government should go out of their way to prevent a debate on General Keightley's despatches on the Suez operations?

Mr. Speaker: That is not a point of order.

BILL PRESENTED

ELECTRICITY (BORROWING POWERS)

Bill to increase the statutory limits imposed on the amounts outstanding in respect of borrowings by the Electricity Council and Electricity Boards, presented by Mr. Maudling; supported by Mr. Erroll, Mr. Niall Macpherson, and Sir Ian Horobin; read the First time; to be read a Second time upon Wednesday and to be printed. [Bill 50.]

Orders of the Day — HOUSE PURCHASE AND HOUSING BILL

Order for Second Reading read.

4.10 p.m.

The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke): I beg to move, That the Bill be now read a Second time.
Provided people can afford to buy a house and look after it, home ownership is a splendid thing in every way. This Bill is the greatest Measure for assisting home ownership that has ever been introduced by any Government. That is why my right hon. Friend the Secretary of State for Scotland and I submit it with pride and confidence to Parliament.
In the whole of Britain about 4 million families own their homes already, the numbers rising every year. Nearly £600 million are being invested every year in house purchase. but it is still not by any means possible for everyone who wants to buy a house to get a mortgage. At present, there is simply not enough money available to lend. If house ownership is to go ahead at an increasing pace—and that is what we on this side of the House, at any rate, desire—more capital for advancing on mortgage must be made available.
The question which the Government examined was how to do this most efficiently and most conveniently. The necessary capital has to be provided by the Government. That much is clear; but how? To set up a new organisation on top of the existing lending agencies would be administratively expensive; not only that, but it would be a duplication, and an unnecessary duplication. The sensible course is to use one of the agencies that exist already. By far the largest for this purpose is the building society movement. The building societies' sole object is the encouragement of home ownership. They have an organisation covering the whole country, reaching into every town and village, and they are already lending nearly £400 million a year. The building society movement provides the most convenient method of lending the additional money required, and that is why the Government have chosen the building societies to be the instrument of their purpose.
Discussions were held with representatives of the Building Societies Association to find out whether they would cooperate. With their help, a scheme has been devised, which I will not go over in detail, because it is all set out in Appendix I of the White Paper on House Purchase which we presented to Parliament last month. The Government believe that this scheme will achieve the end we have in mind—that is, to make it possible for any credit-worthy borrower keen on buying a house to get an adequate mortgage for the purpose.
I have heard it said that the Government ought to use the local authorities rather than the building societies. As a matter of fact, for every £6 the building societies are lending for house purchase the local authorities are lending £1. This is a useful supplement to what building societies and other private agencies are doing. But lending for house purchase is only one of the many functions of local authorities, and it is not by any means their most important function. Nor. indeed, are all local authorities equally interested in it. I hope that they will continue to lend wherever they find a need.
Even with the assistance which the Bill is extending to building societies, there will still be a part for local authorities to play. The Bill gives them the power to lend up to 100 per cent. which the building societies and other agencies already possess. I doubt myself if local authorities will think it right or find it necessary to lend up to this limit in any large number of cases. The fact that we are removing the existing statutory limit of 90 per cent. on their discretion to lend shows that we look to them to go on lending, but I am sure that for a wide extension of lending facilities the sane course is to look to the building society movement.
In my speech today I want to clarify some of the details of the Government's plan. The broad picture is known already. It has been greeted with such widespread interest and enthusiasm. Never before has it been possible for any credit-worthy person wishing to buy an old, sound house to be sure of getting a 95 per cent. mortgage on it. That is what this Bill achieves.
This whole scheme of Government advances for house purchase depends on


the concept that certain building societies will be approved for participation in it, and approved societies in that sense will be able to receive deposits from trustees. The building society movement, as the House knows, has been urging the Government to give trustee status to their deposits for some time. There is force in the arguments that they have used, and this scheme affords an opportunity for accepting the idea.
On this part of our plan I want to meet two possible criticisms in advance. The Bill provides that if the Chief Registrar is satisfied that a building society fulfills certain requirements prescribed by the Treasury, he may approve the society. That is in Clause 1 of the Bill. Hon. Members will find the Treasury requirements set out in Appendix II to the White Paper. One of these requirements is that the total assets of the society must be not less than £500,000. I know it is claimed that many smaller societies have got balance sheets just as strong as the larger societies. I certainly do not disagree with that.
It is also said that to exclude the smaller societies from this scheme will lead to withdrawals of deposits from them and to their ultimate disappearance. With that I do not agree at all. The smaller societies play a valuable part in attracting savings, especially from local people, and I do not believe for one moment that to exclude them from this scheme will hamper them.
The reason for the limit in size is this. Trustee status ought not to be conferred lightly. Size does not of itself ensure stability, but as a general rule the larger enterprise is more stable. It is harder for the larger enterprise to come to grief. Proposals have been made at various times for allowing trustees to invest in the ordinary shares of companies. I have never heard of a single proposal of that kind which did not include some test of size based on the capital of the companies. In a Private Member's Bill that was introduced to the House in 1955 the limit for building societies to be able to qualify for trustee status was put not at £500,000, but at £5 million—ten times as high as we have in mind today.
Having regard to the general principle, and also to the fact that some of the smaller societies are conducted by staff who are not employed full time and in

some cases are sharing offices with other concerns, the Government think that it is reasonable to restrict the badge of trustee status to the larger societies. I particularly want to make it quite clear that this implies no criticism whatever of the manner in which the smaller societies are conducted. It is not possible to say how many societies will gain approval under our proposals, because there are a number of different conditions to be observed, but the societies that will qualify by size account for about 97 per cent. of the total assets of all the societies covered by the Bill.
Then I have heard it suggested that the proposed minimum ratios of free reserves to total assets are too low. This is only one of several financial safeguards. So far as the safety of trustee funds is concerned, the most important condition is that the total amount of the societies' deposits and all other liabilities must not exceed the total amount due to shareholders. Depositors, therefore, have, in addition to the security of other factors, the benefit of a minimum reserve of 50 per cent. imposed by that condition alone.
But as well as ensuring the safety, in the last resort, of trustee funds it is desirable that approved building societies should conform generally to minimum financial standards applicable to all well managed and prudent societies. The ratio of 2½ per cent. of free reserves to total assets was arrived at with this objective in mind. It relates to free reserves. It excludes reserves provided for losses on mortgages and other contingencies.
The House will also note that the power given to the Chief Registrar to approve a society is permissive and not mandatory. A society conceivably might be conforming to the strict arithmetic of the prescribed requirements and, even so, might be pursuing an unsound lending policy. The Bill is drafted to give the Chief Registrar discretion in such cases not to approve the society or to withdraw approval if approval has been already given.

Mr. A. E. Cooper: Would my right hon. Friend say whether the figures, which have been agreed and which he is now putting to the House, are the arbitrary figures arrived at between the Treasury and his Ministry, or were the figures arrived at between his Ministry and the Building Societies Association?

Mr. Brooke: The Government take full responsibility for the figures in Appendix II of the White Paper. These are the Government's decisions.
I now come to what happens when a society has been granted trustee status. Clause 1 empowers my right hon. Friend the Secretary of State for Scotland and myself to lend to that approved society moneys advanced from the Exchequer. Clause 2 sets up the machinery for this. The arrangements are set out in the White Paper. Building societies receiving Exchequer loans will be required to enter into a binding undertaking which will ensure that they use any money which they borrow from the Government on the terms set out in the White Paper. The purpose of these loans is to help the purchase of all houses, both old and new. The limits set out in Clause 2 (2) are simply a device for defining and identifying Government loans.
This method has been chosen because up to now it has been on older houses that it has been most difficult to obtain mortgages. Exchequer money will be available for financing all mortgages granted on houses falling within the age and value limits set out in Clause 2, but, of course, this will enable societies to use more of the money obtained by normal deposits to make loans on newer houses. At present, societies are lending between £40 million and £50 million a year from their own funds for the purchase of pre I919 houses. Clearly, therefore, if they now make use of Exchequer moneys for lending on older houses, they will have a considerable additional amount of money to lend on newer houses.

Mr. Albert Evans: If building societies find that they are unable to grant mortgages on older properties, will they be in a position to use the £100 million mentioned in the White Paper for their normal business of advances for modern and newer houses?

Mr. Brooke: No. As the Bill is drafted, they will not be able to draw money from the Exchequer to lend on newer houses. But they will be able to lend on as many houses as they think fit and which come within the category set out in the Bill.
As has been said, the Bill provides for Exchequer advances up to the limit of £100 million. How long this will last is

impossible for anyone to estimate. After all, so much depends, not only on the demand for mortgages, but also on the success of the societies in getting increased deposits from the public. I am sure that the societies will not relax their efforts to attract savings. It may be that in this healthier economic climate, and aided by trustee status, the societies will not need to draw heavily on the Exchequer to meet all the demands made on them. That is their hope, I believe, and it is the Government's hope. The money will be there for them if it is needed. Should the £100 million all be used, the Government will be prepared to come back to Parliament for more.
The limits which will govern Exchequer advances are that the house must have been built before 1919 and its value must not be more than £2,500. We believe that these limits are generally suitable, but hon. Members will see that the Bill gives power to vary them by Order, so that at some future date, should they prove unduly hampering, they could be altered. The House will, of course, understand—

Mr. G. R. Mitchison: Before he leaves that point, I wonder whether the right hon. Gentleman would say why he selected that method of defining and identifying Government loans?

Mr. Brooke: I think that I have said that in my speech. The hon. and learned Member will appreciate that some method was desirable. Clearly, the building societies would go on with their normal method of attracting funds from the public and they would not need or wish to be financed wholly from the Exchequer. Therefore, it was desirable to find a line of demarcation, and, taking things all in all, it appeared to the Government that the most sensible and rational thing would be to relate Government loans to mortgage advances on older houses.
This was a clearly definable class. It was also the class, as I explained earlier, in which the applicant, at present finds greatest difficulty in getting a mortgage, because the building societies, with their present limited funds, not unnaturally tend to lend more freely on newer houses than on older houses, which may be a more doubtful risk.
I now come back to the figure of £2,500. The House will, of course, understand that the insertion of that figure in


the Clause does not mean that societies would not advance money on more expensive houses. The main effect of the limit is that a 95 per cent. advance is not promised for houses costing more than £2,500.
It has been put to me that in London £2,500 is too low. I am not sure that £2,500 is not a high enough figure even in London for houses built before 1919. But I realise that in London house prices tend to be higher than elsewhere; and certainly for houses built between the wars, which are to be covered in agreements with individual societies, £2,500 in the London area may be too low. Subject to anything that may be said today, I am ready to discuss this figure further with the representatives of the building societies in relation to the London area.

Mr. J. A. Sparks: Will the Minister also consult the London County Council and the other local government authorities on the same line?

Mr. Brooke: I will endeavour to keep in touch with the local authorities on all these matters. The hon. Member will, I think, appreciate that the first thing to do is to consult the Building Societies Association, because if the societies are not willing to work the scheme at another level, it would be a waste of everybody's time to consult further about it.

Mr. A. E. Hunter: In London, would not the Minister's suggestion of raising the figure of £2,500 tend to put up prices?

Mr. Brooke: If the whole scheme were made too generous, it would tend to raise prices. Nevertheless, if one is working a scheme like this, which, by common consent, is a sensible scheme, one wants to ensure that it will have a reasonable application everywhere. What I would propose to discuss further with the representatives of the building societies, subject to anything that is said in today's debate, is whether it would be advisable to fix a somewhat higher level for the London area.
The Council of the Building Societies Association has already agreed that societies entering the scheme should undertake to make loans in accordance with the terms proposed—that is, among other things, up to 95 per cent. of the value if asked for—not only to the purchasers of

houses built before 1919, but also, so far as their funds permit, to any purchaser of a house built between 1919 and 1940.
It has been suggested in some quarters that the Government should support the giving of mortgages of up to 100 per cent. Most building societies are wholly opposed to any general rule of advancing 100 per cent. The Government believe that it is, in general, in the interests of purchasers that they should have something in hand before they start buying a house, whether they have got that something by saving or otherwise. I have expressed that view in the House before.

Mr. Mitchison: I am sorry to interrupt the Minister again. He has spoken about the building societies meeting the needs of borrowers. I do not understand whether at present they are or are not giving any preference to applicants in respect of these small old houses. If they have undertaken to give any such preference, could we know what it is?

Mr. Brooke: I am not quite sure what the hon. and learned Member means by "preference" and I do not want to take up too much time in expounding a long Bill. These questions may he clarified later in the debate.
The building societies will be examining every application on its merits. What a particular society will know is that if it decides to make a mortgage advance an the type of house that falls within the limits set down in Clause 2—that is, a house built before 1919 and with a value not exceeding £2,500—it will be sure of getting from the Exchequer an advance to cover the amount which it is lending.
At present the scales are weighted against the applicant who wants to buy one of the older houses, because the building societies do not have enough money to meet all demands. What we are trying to do is to take away that weighting of the scales and to make sure that everybody who wants to buy one of these older houses can get what he certainly cannot get now—that is, the assurance of a 95 per cent. advance, if the house is a sound one and if the applicant is financially in a position to go forward with the purchase.

Mr. Cyril Bence: May I ask a question? I have read the White Paper and the Bill to find


whether the conditions laid down for the granting of a mortgage on a house are such that the house must be with vacant possession. Could a mortgage be given for the sale of one of these older houses if a tenant was in occupation and the house was decontrolled and, as a result of granting a mortgage, the tenant in occupation could be given notice to quit?

Mr. Brooke: This is a scheme for enabling people to buy houses to live in themselves.

Mr. Sparks: They may already be in the house.

Mr. Brooke: Yes; they may already be in the house.
To return to the point I was making about 95 and 100 per cent. advances, the requirement of a 5 per cent. deposit is not a severe one. It means £50 for a house costing £1,000. There are, of course, other costs associated with house purchase, but there is no evidence that people who can afford the regular payments on house purchase are being debarred from buying a house by inability to find the initial sum in one way or another.
Clause 2 (1) empowers my right hon. Friend the Secretary of State for Scotland and myself, with the approval of the Treasury, to direct what interest shall be payable by the societies on the advances made to them. This enabling provision is in a form that is common to many Acts providing for loans out of the Consolidated Fund. In most cases, loans of this kind are made at a rate of interest which is fixed at the time of the loan and which remains unaltered through the whole term of the loan. Here, however, we have a special and unusual situation.
As the White Paper explains, we envisage a special arrangement for determining the interest charge. It is the traditional practice of the building societies to make loans at rates of interest which may be changed as time goes on. These changes in the lending rates of the societies are not made with great frequency. When they happen, they are a reflection of a definite change in the whole level of interest rates generally prevailing.
In considering the interest arrangements for the Exchequer loans, the Government think that it would be inappropriate to

make fixed interest loans to the societies which, in their turn, charge interest at variable rates over the whole of their business. We thus arrive at the plan, described in the White Paper, for an interest charge on the Exchequer loans linked to the prevailing lending rate recommended by the Building Societies Association, but at a differential of one half of 1 per cent. to allow for the expenses of the societies and the risks that they will carry in relation to this business.
That is our general intention as to the use of the power under Clause 2 (1) to fix the rate of interest on the advances. It is the one best adapted to the circumstances of the whole scheme. I cannot say what will be the exact rate of interest payable on the Exchequer loans under the proposed formula, either when the scheme come into effect or subsequently. That will depend upon the prevailing level of interest rates generally at the time, which, in turn, will be reflected in the rate currently recommended by the Association.
Subsection (1) of Clause 2 also provides for settlement of the repayment terms for the Exchequer advances. The Exchequer loans will be for a period of twenty years. repayable on an annuity basis half-yearly. This twenty year period has been broadly fixed to reflect the sort of term for which the building societies in general make their loans. There cannot be any exact and precise matching of the terms of repayment to the Exchequer with those of repayment by borrowers to the societies on all the very many loans which may be financed from Exchequer borrowings. Flexibility will be afforded by the right, which we intend to allow the building society, to repay the whole or any part of the loan at any earlier time it chooses.
What does all this mean to a person who wants to become a home owner? Average earnings in industry are now about £13 a week. Under the ordinary building society rules, someone with an income of £13 a week could buy an £1,800 house, which would cost him about £140 down, all in, and about £12 15s. per month. He need not spend nearly as much as this, because outside London, at any rate, there are good sound houses, built before 1919, available at £1,000 or under, which will be within the reach of almost anyone who


really wants to own his house. If it is one of the older houses, by the Bill the Government are seeing to it that the building societies will no longer say, as they constantly have to say now, "Sorry, we have not got enough money to meet all demands."
I want now to come to Part II of the Bill. The vast majority of houses built in the early years of this century are structurally sound and have many years of life in front of them, but they lack amenities which we now think of as essential for any decent house. Social habits have changed, and have changed for the better. The Government are rendering their new Measures to encourage house ownership still more attractive by linking them with facilities for improving the houses and by putting in requirements which everybody nowadays accepts should be part of any house.
Housing authorities at present, as the House knows, have power to make grants to private owners who are improving their houses. Authorities can also receive Exchequer grants for the improvement of their own council houses if they wish. These grants, which were started in 1949, were hardly used at all until my right hon. Friend the Prime Minister, when he was in my place, overhauled them in his 1954 Act. They then rose from about nothing to between 30,000 and 40,000 grants a year, and at about that level they have stayed.
This figure of between 30,000 and 40,000 is still small in relation to all the houses which could benefit from improvement. That must be 3 million to 4 million houses. We, as a Government, want to speed up greatly the rate at which these houses are being improved.
Some people have thought that the prime cause of the difficulty is the unwillingness of housing authorities to make grants.

Mr. William Hannan: They are dead right.

Mr. Brooke: We have been looking into this, and it is not so. The vast majority of local authorities co-operate willingly. Only a very small proportion of authorities have never made a grant, and sometimes this is because they never had an application for a grant. The main fault lies elsewhere.
The present system of grants was designed to cover all the possible variations open to an owner in improving a house or in converting it into two or more separate dwellings. The various combinations of possibilities are enormous. That is why the scheme has to be complex, and also why it has to be at the discretion of local housing authorities. It has to be complex to ensure that the grants are based on the work which must be done; it has to be discretionary because the work needed cannot be defined in general terms, and it has to be examined and discussed in each case. It is the time taken to deal with each individual case that has deterred many an owner from launching out on an improvement grant scheme at all. Besides that, some of the conditions that attach to houses which were improved with grants are more restrictive than there is any need for, and they have deterred some owners from applying for grants.
The Government have, therefore, decided that the present scheme ought to be modified in some of its details, and, more important still than that, that it should be supplemented by a new scheme with a new and speedier procedure than the old. All this is in Part II of the Bill for England and Wales, and in Part III for Scotland. I will not presume to expound the Scottish provisions, because my right hon. Friend the Secretary of State will be doing that later.
Clauses 4, 5, and 6 set out for England and Wales the new scheme which is being added to the present one. The new scheme is for a standard grant towards putting a bath, hot water supply, water closet and satisfactory facilities for storing food into a house which has not got these at present. The standard grant to cover all four items will be £150 at the maximum. Provided that the local housing authorities are satisfied on the simple points set out in Clause 5, they will have to pay this grant; and it will be paid on the cost actually incurred by the owner, and not on the estimated cost, as at present.
To qualify for this standard grant, an owner will have to show that his house lacks all four of these things or some of them, and he will have to arrange to make sure that the house is provided with all four at the end of the improvement. He


will also have to satisfy the local authority that the house is worth improving, and that if the improvements are made the house is likely to last and be lived in for at least another fifteen years. If some of the four items are already in the house the maximum amount of grant which the owner can get would be reduced. The four standard items are the things which experience has shown are commonly lacking from most of the houses still worth improving.
The details of improvements needed in any particular house, of course, vary widely, and so does the cost of carrying out the work. Even in identical houses, owners wanting the same improvements may want them arranged in different ways, so that even there, there may be wide variations in costs. Any scheme which is to be simple must of necessity have a certain rough and ready quality. The maximum grants and the amounts by which they are made up are not sums which can be calculated precisely and related to the average cost of any improvement. They do not necessarily reflect any particular proportion of the cost of installing these items in any house.
What they do, however, is to represent a substantial contribution towards the cost of putting these items into a typical house, a contribution which ought to be a strong enough encouragement to the owner to carry out the work, but a contribution which is not, at the same time, extravagant. We have to remember that all the money for these grants is found by the taxpayers and the ratepayers.

Mr. Sparks: In regard to the local authorities' contributions towards the grants, I presume that the present basis will be maintained whereby the Treasury pays 75 per cent. and the local authority pays 25 per cent. Can the right hon. Gentlemen say whether the 25 per cent., which is the charge on the local authority, will be allowed for in the general grant from the Exchequer each year, or how the local authority is to finance this proportion of the grant?

Mr. Brooke: It is the case that there is no change in the 75 and 25 per cent. ratio, I shall expound in a moment. The Bill elsewhere somewhat improves the scheme where a local authority is seeking to modernise its own houses. Of course,

we have let the local authority associations know what we are doing, and the hon. Member will recollect that housing is not one of the services which come within the general grant at all. It does not classify as relevant expenditure under the general grant.
The Government's hope is that a great many people who buy older houses under our scheme for house purchase in Part I of the Bill will take advantage of this new standard grant in Part II for improving such houses, and I am glad to tell the House that it has been agreed with the building societies that societies lending to people buying their homes under our home ownership scheme will also lend them, if they want it, the balance of the cost of putting in these four standard items. This means that a man buying a house under the Government scheme can be sure of raising the money he needs to make the basic improvement to bring the house up to date. He can receive substantial help by way of grants towards his costs in doing so.
I want to make it crystal clear that this new scheme for standard grants does not in any way supersede the existing improvement grant scheme. If an owner thinks that in the case of his house the cost of putting in the four basic amenities would be very high, then, instead of asking for a standard grant, he will be perfectly at liberty to apply for an ordinary improvement grant. In that case he will have to satisfy the housing authority that his house has a life of at least thirty years. He will also have to bring the house up to the full standard of fitness at present laid down for improved houses, commonly known as the twelve point standard.
This standard is designed to ensure that the house, after allowing for its age and structure, is in every respect as good as a newly-built house. It will mean that in many cases the owner will have to do additional work over and above putting in the four standard items. On this basis he can receive a grant of up to £400, not £150. Alternatively, of course, if he takes the standard grant there is nothing to prevent him doing additional work at his own expense.
Many owners may wish to take advantage of the simplicity of a standard grant even though they intend to do more to their houses themselves. The modifications which experience has shown to


be desirable in the present scheme are met by Clauses 9 to 12 of the Bill. I will not go into detail, but I will mention the essentials.
Firstly, local authorities are to be required to give reasons in writing if they refuse a grant or if they refuse to pay the maximum grant available. Secondly, the conditions which attach to a house improved with grants—an example of that is that unless occupied by the applicant or by a member of his family the house must be kept available for letting —are only to apply for ten years in future instead of twenty years. Thirdly, owners are to be entitled to free their homes from the grant conditions by repaying the appropriate proportion to the local authority whenever they wish. The local authority will no longer, as under the present law, have the power to refuse to accept earlier repayment. Fourthly, owner occupiers are to be entitled to sell to other owner occupiers houses that have been improved with the aid of grant without obligation to repay the outstanding balance of the grant, provided that they or members of their families have lived in the houses for at least three years.
The purpose of all these grants is to improve housing conditions. I am sure that we should keep that test firmly in mind and that we should take as generous a view as we can of the conditions that ought to apply. That is what we have sought to do in drafting the Bill. From the national standpoint, this is the best way to ensure that the nation gets continued use of this huge number of older houses and that they do not go down prematurely into slum conditions. I would remind the House that old houses without modern conveniences tend to go downhill, and that slum clearance is from every point of view, human and financial, a very costly operation.
Then there is the question of the rent to be charged for houses that are improved or converted with grant. As the House knows, a maximum is laid down by law. If a house improved with the aid of grant is within the control limits of the Rent Acts, then they, of course, settle the maximum rent. In the commonest case they settle it at twice the gross value plus 8 per cent. of the owner's share of improvement. But if a house is outside the rent control limits, or if it is converted into two or more

separate dwellings—this, of course, takes it out of control—the Rent Act limits may not produce the appropriate figure. The appropriate figure is a rent fairly comparable with the rents of similar houses in that neighbourhood.
Rents in the free market vary in different parts of the country. No standard formula would or could produce the right result everywhere. Provision is therefore being made in Clause 12 of the Bill for the local authority to fix the fair rent in these cases. I believe that this will be generally welcomed by local authorities who want to see modernisation of the houses in their areas going on.
In addition to making grants, local authorities, as I have just mentioned in reply to the hon. Member for Acton (Mr. Sparks). can, of course, receive grants from the Exchequer for the improvement of the houses which they own. But the present system has proved in practice to be exceedingly and quite unnecessarily involved. The opportunity has therefore been taken in Clauses 16 to 18 of the Bill to simplify the procedure here and to bring grants for local authorities as nearly as possible on to the same basis as grants made by local authorities to private owners. At the same time we are rectifying errors in earlier legislation which have debarred local authorities from getting grants on some of the houses which they own, and we are enabling county councils to receive grants on their houses.
No one, not even the wisest of men, can forecast how many more people will take advantage of the new grants system. The Government intend to do their best to see that the new opportunities are widely understood by owners. We mean to do everything to encourage local authorities to make the greatest possible use of grants, and I feel certain that we can count on the willing co-operation of the local authorities. We are giving them new opportunities for getting the housing conditions of the people in their areas improved.
The comprehensive and imaginative plans contained in the Bill will make a real impact on the improvement of the older houses up and down the country. The Bill is the newest and latest unfolding of the Government's carefully thought out policy for better housing. First of all, we enormously increased the rate of


building. More than 2 million houses have been built since the present Government took office. We are heavily engaged on a renewed drive, started by the present Government, to clear the slums; and now this Bill will mark a further step forward in the process of improvement. It will also enable thousands and thousands of people to realise their great ambition of owning their own home.

4.59 p.m.

Mr. G. R. Mitchison: May I first congratulate the right hon. Gentleman on having quite successfully overcome any traces of the natural modesty which he once used to have? He reminded me of somebody who was trying to sell a watch at a fair. The difficulty about the watch is that he stole it from the Labour Party, and having stolen it, he has put quite a lot of dirt in the works. I am not at all certain that it will now tell us the time, or go. We shall have to look at that in a minute.
When he came to "the newest and latest unfolding" of the Government's policy to improve housing I was compelled to remember some of the Government's earlier efforts, in particular the 1954 Act which was introduced by the right hon. Gentleman who is now the Prime Minister. It tried to get the landlords to make some improvements in houses and was described by my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) as "a mouldy old turnip for the landlords". And so indeed it proved to be. The turnip or swede or mangel-wurzel has unfolded, has now appeared on the scene. Let us have a look at the vegetable.
First of all, there was one claim that surely nobody who has any knowledge whatever of housing in this country could possibly make, and that was that this was an attempt—or was it the greatest attempt?—to promote home ownership. Arrangements have been on the Statute Book for many years now and, as the right hon. Gentleman himself told us, are being extensively used to enable local authorities to do just that, and they account, he told us, for about one-sixth or one-seventh of the total advances so made.
I want to point out one thing to the House first—that the terms of this scheme

and of this Bill are giving to the building societies a distinct preference, a hidden subsidy, if hon. Members like to call it that, compared with what the local authorities are getting. The building societies, at present rates, are to get their money from the Government for 5½ per cent, and lend it to borrowers at 6 per cent. Under the Small Dwellings Acquisition Acts the margin is not ½ per cent. but ¼ per cent.
It is perfectly true that a great many advances, an increasing number, are made under what is now Section 43 of the Housing (Financial Provisions) Act, 1958, and used to be Section 4 of the Housing Act. Of course in those cases it depends on the terms on which the local authorities borrow, but one can ascertain from the accounts of local authorities what their working margin is. I do not say that in every case it is less than ¼ per cent., there may be some exceptional ones where it is not, but in the vast majority of cases it is considerably less than the building societies are to be allowed as a working margin.
I see the hon. Member for Ilford, South (Mr. Cooper) sitting there. Ilford has been very good in this way. It had about £5 million outstanding by way of advances for house acquisition at the end of March, 1958. Without allowing for tax, which does not come into these figures, it was actually working on a margin a little bit over ⅛ per cent. instead of ½ per cent. Other local authorities with margins in some cases lower and in others higher than that are running distinctly below the ½ per cent. which is allowed to the building societies under this Bill.
Moreover, there is another point. The local authority goes to borrow, and instead of being able to get its money without difficulty at 5½ per cent., under the rate at present ruling for a 20-year loan it will have to pay 5⅞ per cent. to the Public Works Loan Board. That is supposed to reflect the market rate. On top of that there is another 5s. for stamp and another 4s. for commission, The net result is that between the two sets of lenders the building societies are to get their money from the Government with far less trouble and pay a rate ¾ per cent. less than the local authorities are at present paying. It may be said that the Public Works Loan Board rate


may change. So, too, will the rates payable by the building societies change, and they will change in accordance with the decisions of the Building Societies Association from time to time.
Therefore I make the point quite definitely that money is being made available to the building societies on terms preferable both as to the interest rate and as to convenience to what the local authorities are getting, and without objecting for the moment to what they are doing for the building societies I ask the Government, "Why do you do nothing parallel for the local authorities? Why was that important source of funds for this purpose completely neglected?" It is perfectly true they have been allowed to make advances up to 100 per cent., but what I am talking about is where they are to get the money from to do it, and on what terms.
I was glad to hear the right hon. Gentleman say that by and large the local authorities are perfectly willing to carry on this sort of business and carry it further, but when he discussed the matter with the local authorities did they say they felt unable to carry it out on the terms which were offered to the building societies? Not a word was said about that. Without wishing to exclude the building societies I must comment, and comment forcibly, on the omission by the Minister of Housing and Local Government to give the local authorities similar facilities to those which he is giving to the building societies.

Mr. Cooper: The hon. and learned Gentleman is presenting to the House an entirely misleading picture. The figure he has given in relation to the building societies is a gross figure; that is to say, the total money they receive and the money which they lend, and it takes no account of the cost of administration. The figure which he gives for local government finance for Ilford of ⅛ per cent. is a net figure; that is to say, the sum available to the borough council after charging the town clerk's department and the borough surveyor's fees.

Mr. Mitchison: I am sorry, but I quite fail to appreciate the point of the hon. Member's comments. No doubt, he will develop it later. All I am on is this, that building societies are getting a margin of ½ per cent. under this arrangement—

Mr. Cooper: Gross.

Mr. Mitchison: —for small dwellings acquisition and the local authorities are getting ¼ per cent., and when Ilford apparently succeeds in doing better, taking the Small Dwellings Acquisition and the Housing Acts together, than it is able to do with these fixed rents, I am sorry to hear the hon. Gentleman so keen to belittle the excellent activities of his own local authority, which is really doing it extremely cheap and on a very large scale. Probably that is why it is so cheap.
I said just now that the watch had been stolen. I want to make it perfectly clear that it is the policy of the Labour Party when returned to power at the next General Election to provide for advances of 100 per cent. in order to promote house ownership, on which it has always been keen. It was the Labour Party, after all. which introduced these improvements grants. It was the Labour Party which increased the small dwellings acquisition grants, and the Housing Act of 1949 was passed by this party. It is really absurd for anyone to suggest the contrary.
We want to do it not merely for houses of a particular age and character but for all houses which are worth it, if I may say so, but we do make one important provision, and I want to draw the attention of the House to it. My experience. and I dare say it is also that of other hon. Members, is that only too often people who want to buy their own house. for reasons into which I will go in a minute. stretch themselves to the limit to put down the deposit and pledge themselves for future payments—and forget about the repairs. To some extent this Bill is particularly directed to a type of house, and I will come to that, too, in a minute; and it is obvious that on this type of house the most formidable repair bills are bound to be accrued. I cannot resist the impression that the effect of the Bill, coupled with the Rent Act and with the reduction in council house building, will be to assist landlords to foist on to their tenants the purchase of a number of houses which the landlords are only too glad to sell.
That depends, of course, on the extent to which the advances in the Bill are to be directed to these pre-1919 houses of not more than £2,500 or thereabouts in value. Unfortunately, I could not get, nor


did I expect to get, from the right hon. Gentleman any clear statement about that, and the fact is that it is far from clear what the result will be and how far these advances will be taken. The reason is that a great many building societies, particularly the Halifax Building Society, are already making a very large proportion of advances on exactly that type of house. I understand that the Halifax Building Society advances on this type of house about one-third of its total.

Mr. Maurice Macmillan: It is 23.3 per cent.

Mr. Mitchison: I am sorry if I got it wrong, and I can assure the hon. Member that I got it wrong on good authority. Perhaps I need not go into it in great detail, because on the point I am making it does not matter. We both agree that it is above 20 per cent., and that is the figure which will limit the total of advances of this kind; they will be limited as soon as they amount on a capital assessment to one-fifth of the deposit and loan capital of the building societies.
To a considerable extent, therefore, this is being done already. I agree that the extent varies and that the average figure is probably lower than that for the Halifax Building Society. Quoting from the Building Societies' Gazette of this month, it is suggested that the figure is somewhere over one-eighth—over 12½ per cent. I am taking year-by-year figures, and, broadly speaking, they will work out in the same proportion as the capital figures. Broadly speaking, therefore, it is true to say that a great deal of this is being done already by the building societies.
The question is, are the building societies as short of money as the right hon. Gentleman leads us to believe? Here we can turn only to the building societies themselves. I find a statement on the subject in the Building Societies' Gazette of this month, made by a gentleman who appears to be the Vice Chairman of the Council of the Building Societies Association. He points out quite rightly that there have been fluctuations and that there have been falls in recent years. Apart from the effect of the Bill—for it can have had no effect yet—he comes to this conclusion:
During recent months there has been a remarkable improvement from the national

point of view and there are now clear indications that so far as building societies are concerned the tide is turning and that funds are beginning to flow in again. It is surprising how quickly the situation can change once such a trend is firmly established, and I am optimistic enough to believe that the time is not far distant when we shall again be able to meet the demand in full.
This is not with reference to the Bill; this is what is happening at present.
On 30th October, when the right hon. Gentleman made the first announcement of these proposals, the Financial Times wrote:
The more immediate problem of the building societies, that of attracting enough new deposits to continue lending at a steady rate, seems to have been solved for the time being. The… net inflow of funds, and consequently new loans also, fell sharply in the first quarter of 1958.
Why?
This was the result of the high Bank Rate at that time, which caused a rise in the level of interest on investments, like hire-purchase finance companies, which compete with the building societies for short term money….Nevertheless building society deposits in the third quarter of this year, for which definite figures are not yet available are expected to be well up on the second quarter also on the same period of 1957.
The article was accompanied by a chart showing a very sharp rise in building societies' deposits and shares—in net money paid in, apart from withdrawals.

Mr. Nigel Fisher: I should like to assure the hon. and learned Gentleman that the building society of which I am a director is still turning away, through lack of money, mortgage applications which are perfectly good in themselves.

Mr. Mitchison: That may be. The position may differ between one building society and another. I should have thought that any building society of which the hon. Member for Surbiton (Mr. Fisher) was a director would undoubtedly attract a large number of applicants, so well known must be his kindness of heart. I can give only the general picture, and it is the general picture which matters. I do not want to be unfair about it. The summary is that building societies' funds go up and down. Sometimes they have as much as they want and more than they want, and sometimes they have not. But there is no general and continuous shortage of funds for making advances such as the right hon. Gentleman led us to believe, and it


is not the case that building societies neglect this type of mortgage. The amount depends on the building society, but they certainly do a good deal of the business already.
I therefore come to this conclusion: I see advantages in these arrangements, and we do not intend to divide against the Bill. It resembles too closely the working gold watch which we missed from our parlour a short time ago. I have a copy of the working gold watch. It is called "Homes of the Future". But there is a lot of dirt in the works now, and some of the dirt is the complete failure to use the local authorities and a preference given, for no reason that I can see, to the building societies. In addition, there is a certain temptation to people to take these advances without providing for repairs. It was just for that reason that in the original gold watch, "Homes of the Future", we made a stipulation about the general fund for repairs and contributions to it. I am quite sure that we were right, because it is a peculiar difficulty.
I turn next to the hot water supply, the baths and the rest of it, and here, as in the earlier part of the Bill, there are any number of Committee points. I will not try to deal with them now. Questions about the sufficiency or insufficiency of the qualifications for trustees' status are matters which would be much better dealt with in Committee than on the Floor of the House today. but I have one or two comments to make about the baths and the standard grants.
The first is that the applicant must be the owner, whether the house is tenanted or whether he lives in it; he is the owner, or at any rate the leaseholder on a tolerably long lease. He is to have his property improved by a compulsory grant made by the council out of the rates, with some Government assistance. Certain consequences will follow.
First, if rent control remains, the rating of the house may well be put up and the rent limit may or may not go up accordingly. As the law stands at present, that will not be the case, and I want to make it quite clear to the Minister that I do not think that it is the case. But who knows how far rent control will be cut down further? I have a pretty good idea that the party opposite will not get back at the next General Election, but I also

have a pretty good idea that if it does get back there will be very few rent controlled houses left in the country after quite a short time. For what other purpose have the Government taken power by Ministerial order to extend decontrol?
To decontrolled houses new provisions will apply. There used to be a provision limiting the amount of rent, either by rent fixed by the "advancing" authority or by the rent limit that is contained in Section 20 of the Rent Act. That is scrapped, not wholly for the benefit of the tenants, and it is now left for the local authority to fix the rent according to the rents of houses in the neighbourhood. That is the first change, which is not wholly for the benefit of the tenant.
The second change is that the owner of the house may have money put into his improvements and then may sell to someone else three years afterwards at a higher price than he would have got otherwise. That person, wanting the house for his own occupation, can turn out the tenant if there is one, and anyhow will get no particular benefit from those grants. The original owner will have put the money in his pocket and got away with it as part of the price. That appears to be a very useful provision for some landlords, including landlords who have not done this work on their own house previously. They are not confined to individuals. There are many large companies who own blocks and blocks of this property, particularly in the big cities, who will get quite a substantial benefit if they work the Bill as it could be worked.
I come to the third of the specific points I wish to make, though I have some general observations to make too. It is that this money will come out of the rates and will be an obligatory charge upon the rates. I agree that there are grants in aid, but so far as the money comes from the rates there will be an obligatory charge at the moment when local authority finances are being fitted as tightly as may be into the whole general grant scheme. I do not make the mistake of supposing that housing has to do with the general grant, but housing subsidy is a grant; and a very large proportion of the money which local authorities get from the central Government now comes from a tightly fitting general grant.


and an additional burden is being put on the rates at a high rate of interest. That is the present position.
On this matter—Part II of the Bill—I am not sure that I can do any better than quote the Economist of 6th December last under the heading "New Deal for Old Dwellings?" After setting out the broad outlines of the Government's scheme it says:
It is easy to see what the Government is trying to do, much harder to feel sanguine about its prospects of success. The home purchase scheme will work, if it works at all, by finding buyers for the rather better old houses within the upper limit of £2,500….
Then it makes the comment, which the Minister must have seen, about that not being enough in London.
It continues:
The Government in fact is still tackling a very desirable objective by very costly methods. Might not a better solution be found by taking a leaf from the programmes of both political parties?
This is a Liberal paper, but it does not seem to recognise the existence of the Liberal Party.

Mr. Donald Wade: It often has some very caustic things to say about the Liberal Party.

Mr. Mitchison: Who am I to interfere in these domestic differences? They have existed before.
With reference to the original "gold watch" of which I have spoken, the Economist says:
… there are blocks of older houses—those which will figure in the next slum clearance drive—for which "—
I differ from the next four words—
(but only for which) it would be sensible to adopt Labour's recipe: to encourage the local councils to buy them and systematically carry out a temporary renovation plan, on the lines of the scheme now operating in Birmingham.

Mr. Cooper: The hon. and learned Member has quoted from the Economist of 6th December. Would he quote from the issue of 13th December? It deals with municipalisation and under the heading "Planners in Wonderland" it cuts to pieces Labour Party policy in "Homes for the Future" and the municipalisation of housing.

Mr. Mitchison: No, I will not, because I have no copy with me, for one thing, and for another it is not what I am talking

about. Those seem very good reasons. No doubt the hon. Member will have a bit of fun in a quiet way afterwards if he is fortunate enough to catch your eye, Mr. Deputy-Speaker.
There are a great many of these old, small houses. They ought not to be dealt with unit by unit. They should be dealt with by dealing with whole areas, which is how Birmingham has been dealing with them. They cannot be dealt with by putting in standard improvements. They need a great deal more than that or else a great deal less. As far as I can see, the Bill will not add one house to the total of houses, except that, in so far as it may increase the amount of money lent, it may result in a little private building. But that was not the ground on which the Bill was put forward, and I think that we all agree that it is not likely to have much effect in that way.
This is not a Bill to add to the stock of houses. In so far as it is a Bill to improve the use of existing houses and to improve their character, it is unlikely to have very much effect, partly because what it will do is being done already to some extent, partly because it neglects the possibilities of using local authorities to the full, and partly because, in relation to Part II, the standard grants are really too narrow. One can have all these things and one would still want much more to bring a house anywhere near modern standards.
The last part of the Bill is timorous, and it is the wrong way, on the whole, of dealing with the houses. The use of grants to individual people in this way, while it is useful, can serve only a limited purpose. In the long run, this kind of improvement must be done on a larger scale and in a broader way. Lastly, I trust that hon. Members will remember that the need for the Bill at all, and the need which it is supposed to meet, arises very largely out of the legislation of the right hon. Gentleman and his predecessors, and particularly out of two things.
There would not be a demand to improve houses which are very old— some of which would be worth it and others not—if there were enough new houses. At this moment the right hon. Gentleman is actively engaged in cutting down the building of council houses which meet the needs of the type of people who live in these older houses. How far it is feasible to


promote the modernisation of houses is always a question about which one can argue, but there is no doubt that to cut down the supply of council houses aggravates the demand for, and puts up the prices of, other houses, including older ones.
Secondly, there is the effect of the Rent Act. It may not have had much effect in remote parts of the country—I never thought that it would—but it has had, and is still having, a very marked effect in the big towns, especially London. Hon. Members opposite who think that this is a joke should go and rub their noses in any of the big towns, especially if they sit for constituencies in them. They will not find a queue of people miles long on the pavements on the first available date on which they can be turned out. I never suggested that that would happen. [HON. MEMBERS: "The hon. and learned Gentleman did."] I never did. Hon. Members should read HANSARD. They will find that I did not say that. I said that the Rent Act would lead to two things: firstly, a lot of people having to find new accommodation—many evictions, of one likes to put it that way —and, secondly, a marked increase in the demand for houses to buy, and inevitably for some houses the advisibility of whose repair was doubtful.
I can only say that those who have looked at the matter impartially believe that the present difficulty in obtaining advances for houses is not nearly as serious as the Government wish us to believe, and that so far as it exists at all it has been seriously aggravated by the failure to keep up a supply of council houses and the difficulties caused by the Rent Act. In consequence, although I do not advise my hon. Friends to divide against the Bill, for it is well-intentioned and may do some good, I believe that it will not have a very considerable effect, and that in a number of points it is quite wrong.
It is wrong for one general reason, namely, that whenever there is a choice between benefiting the landlord and anyone else the Government benefit the landlord, and whenever there is a choice between using local authorities or some other body or collection of bodies for a certain purpose the Government always turn down the local authorities. It is not a satisfactory Bill for that reason, but we hope that it may do some little good.

5.33 p.m.

Mr. Brian Batsford: Knowing the friendliness which is always shown to new Members, I ask for the indulgence of the House on this occasion. I have the honour to represent a West London constituency which is largely residential, much of it consisting of streets lined with houses built between the years 1840 and 1890. Those hon. Members who are students of architecture will know that that is a very interesting period, and one which is worthy of increased respect.
I welcome Part I of the Bill, which enables higher mortgages to be obtained in respect of older houses, and I welcome Part II even more. This will enable amenities to be improved by the provision of standard grants. There is, however, the more intangible aspect of the Bill which should appeal to hon. Members on both sides. By aiding the restoration and conversion of old property within our towns the Bill may reduce the threat of development on the outskirts.
It is, perhaps, appropriate that I should make my maiden speech on the subject of house purchase on the same day that my own family is moving house. Other hon. Members who have moved into smaller quarters will know that it is practicable to do so only if one is scrupulously tidy. That applies to the whole of Britain where a very large population is living in a comparatively confined space. We have to be tidy. There is a danger that with the spread of so many towns and villages we may reach the stage where we do not know where our towns end and the countryside begins. By rehabilitating old property we shall make better use of areas already developed and shall be saving our countryside.
I want to raise a few more detailed points which, I hope, will not be too controversial. The first concerns the operative date—1st January, I919. I am tempted to suggest that the most significant and most depressing change in English domestic architecture occurred almost exactly 100 years earlier, in 1819, but we must recognise that 1919 marked the introduction of newer but less durable types of houses, which are less worthy of investment than many houses built in the years before, in some cases even centuries before.
I have always had the impression that building societies were rather hesitant to


advance money on any property which was not absolutely new. I am, therefore, glad that the White Paper which accompanies the Bill suggests that besides advancing loans on pre-I919 houses, the Government will be able to lend money to the same extent on houses built between 1919 and 1940.
My second point concerns the limit of £2,500, which has already been mentioned by my right hon. Friend and by the hon. and learned Member for Kettering (Mr. Mitchison). This limit is bound to impose a varying restriction in different parts of the country. From inquiries I have made I can say that there are very few houses in my constituency which are for sale at £2,500 or less. I would suggest that there is an argument for increasing the limit in respect of houses in the London area, where the land values are so much higher than in the rest of the country. The Minister made provision for this differentiation in recent legislation.
I also hope that when Exchequer loans are made in respect of pre-1919 houses they will not prejudice in any way the lending of money by building societies upon the more valuable older property, which is equally worthy of conversion and adaptation.
Many of the roads in my constituency are tree-lined and bordered with the larger type of house built in Victorian days. While, under no circumstances, could these homes be classified as coming within the £2,500 limit, such is the scale and the solidity of their construction that they are eminently suitable for conversion into flats and maisonettes. Nowadays, as we all know, it is a common practice for smaller units and larger buildings to be sold as opposed to being let. I understand that today building societies will make advances on flats and on these smaller dwellings.
Specific reference is made in Part II of the Bill to dwellings, while Part I refers to houses. I would suggest that, if these Exchequer loans are made for houses of that value, in certain approved cases they might also apply to portions of buildings or to flats. Were such a concession made, it would be welcomed by the large number of people who prefer that type of accommodation.
I am glad to have had the opportunity to support a Bill which, I believe, will do a great deal to benefit those who are seeking homes and, at the same time, serve to modernise and to protect many of our older buildings.

5.41 p.m.

Mr. Arthur Skeffington: First, it is my pleasant duty to convey to the hon. Member for Ealing, South (Mr. Batsford) the warm congratulations of hon. Members on both sides of the House on his maiden speech. Many of us know something of the activities of culture and learning with which the hon. Gentleman is associated outside the House. Now he has entered into another sphere and has shown, I am sure the House will agree, the same distinction. The hon. Gentleman survived the ordeal of making his maiden speech much better than many of us, and certainly better than I did. We listened to him with great interest and we shall look forward to hearing him again many times in the future, when he will bring his great knowledge to bear upon the subjects which we debate.
I turn now from the pleasant part of my task to something which is not quite so pleasant. The Minister said that he introduced the Bill with great pride. We on this side also wish to see every opportunity accorded to those who desire, and are in a position, to purchase their own house. For that reason, in the policy statement, "Homes for the Future", issued in 1956, the Labour Party specifically included a proposal that mortgages of 100 per cent. be afforded for prospective house purchasers at the lowest possible rate of interest. We on this side are bound to wonder how far this Bill is the result of the very friendly reception which our proposal received from the public.
Unlike the Government, the Labour Party, in its scheme, visualised local authorities as being the main vehicle by which such a proposal would be effected. I am glad that even under the provisions of this Bill the local authorities are in future to be able to grant mortgages of 100 per cent. in certain cases; though, as was pointed out by my hon. and learned Friend the Member for Kettering (Mr. Mitchison), local authorities will operate under much harsher financial conditions than those to be enjoyed by the


building societies. I could never understand why the limitation existed in the past.
While everyone wishes to see people undertake mortgage repayments if they are in a position to do so, I hope that a general warning will be given to prospective house purchasers not to undertake heavy weekly or monthly financial repayments which would strain their personal finances. People must realise the extent of the burden that they will be assuming, particularly when purchasing pre-I914 houses. Before the war many people were unable to get rented accommodation, because in vast areas of the country there was little municipal building activity at that time; and to have somewhere to live, those people were forced to buy houses through building societies or in some other way. We all know of cases where far too heavy financial burdens were assumed by people in receipt of very low incomes. When they were faced with an unexpected crisis, such as a serious repair bill or inability to work through illness, such people found themselves facing a very real financial catastrophe.
Before the war the average mortgage repayment, including rates, amounted to between 12 per cent. and 17 per cent. of personal incomes. Those paying at the higher figure often found themselves in difficulties which caused them to economise on other essentials, sometimes even on food. Today, it appears that the average repayment does not represent quite such a large proportion of personal expenditure. In considering these averages one must always bear in mind that they include mortgages taken out a good many years ago, and that they conceal the heavy charges being borne by house purchasers who had to buy at inflated prices since the war and who were forced to borrow at high rates of interest.
I believe that if mortgage repayments account for much more than 10 per cent. of an individual's income, difficulty is likely to arise. On the existing national distribution of incomes a person in receipt of less than £750 a year before tax may well get into financial difficulties if he purchases a house. If one has an income of between £1,000 and £1,200 before tax I think that, even at high rates of interest, monthly mortgage repayments will not prove too heavy a burden—provided always, of course, that such an in-

dividual is lucky enough to escape the calamities which are liable to beset us all in the form of ill-health or a local occurrence like subsidence.
There are about 3 million people in receipt of incomes of between £1,000 and £1,200 who may be regarded as being in a position to afford house purchase. I believe that it is our duty to warn others whose incomes are not so high of the serious burdens which they may find that they have assumed by undertaking the responsibilities of a mortgage.

Mr. Cooper: The hon. Member makes great play with the fact that a man buying his own home may run into difficulties through illness, or for some other reason, and find it a hardship to carry on his mortgage repayments. Assuming That a similar difficulty is experienced by the tenant of rented property, whether privately owned or local authority property, who stands the racket?

Mr. Skeffington: I have in mind an incident which occurred in a part of South-East London where serious subsidence problems were encountered and where house purchasers were faced with an expenditure of £300 or £400 as a result. Such individuals would be gravely embarrassed because there would be no one to help them. That would not be the experience of a man occupying rented property. A great many people, if they had the opportunity to choose between buying good property or renting it, would prefer rented accommodation. All that I am pointing out are the real dangers which have to be faced by people who are to assume this burden.
The second question which I must pose is; why is all this Government finance to be made through the building societies? Over the years most successful public relations work has been done by the building societies and that has often been echoed by politicians. The image has been created that the building societies are wonderful, idealistic organisations. I believe that their value has been very considerably overstressed. After all, the building societies have no interest in a house as such; they have no interest in the buyer as such, and they do not really care whether he buys wisely or badly. They are, in fact, moneylenders plain and simple and not public benefactors.
I am not saying that the building societies have not performed a service, but I think that it is important to try to understand what their real function has been and why it is inadvisable for the Government to give them such extraordinary preferential treatment.
One example of the activities of the building societies and their indifference to the buyer is that in the ordinary way the house purchaser has to pay for the surveyor's report which the building society requires, but he is not allowed to see the contents of it himself. In 1949, a newly-built house upon which a building society advanced a loan actually collapsed. A High Court judge said, following that event
Building societies might perhaps consider whether the great help which they give to people …who want to own their own house might not be extended by giving them the benefit of the expert advice for which the prospective owner is himself paying.
In the Economist of 2nd February, 1952, a spokesman for the Building Societies Association said that the learned judge's remarks
…have been studied by the association with the respect due to them and that discussions are now taking place with other bodies with the object of making arrangements which will carry his suggestion into effect.
I made inquiries and up to last year— five years later—there had been no change in the societies' practice. I do not know whether, under the scheme set out in the White Paper, a prospective purchaser will still have to pay for this report. There is a condition which says that no premium or any other charge shall be payable to a society. It may well be in this case, although, obviously, there will have to be a surveyor's report, that no extra charge is to be made. If there is an extra charge, I hope that the report will be available to the man who has to pay it. That is to me only right and proper. I should like to have an answer to this point.
I mention this as an example which proves the point that I am making, that building societies are really only moneylenders—there is nothing dishonourable in that—but do not let us assume that they are idealistic organisations keenly interested in the personal welfare of the house purchaser or of society in general; they are not. Once a loan is made, the society has no further interest in the

property or the owner so long as the payments are kept up.
I can never understand, for example, why building societies have not thought that it might be a very good thing to have provided for one of the calamities which I mentioned earlier by creating a repairs' fund. If that were done, those who are in difficulties when they get repairs of more than the ordinary kind— I am not referring to decorating—would have some resources to fall back upon. If the building societies show no interest it may well be that this will have to be left to the local authorities to do something in the future, as suggested in the Labour Party's pamphlet, "Homes for the Future".
Why, again, are the rates of interest always so high? Generally, a building society is lending on a cast-iron security. After all, no one can take the house out of the country. I realise that there may be difficulties at certain times in getting sufficient deposits. That may be so if resources of this kind are allowed to be only available on their profitability. I should have thought that from the point of view of society mere profitability on making advances for the provision of a house ought not to be the sole criterion. But if that is the case, then I believe that local authorities should provide these sums of money which they could do more cheaply by raising the money locally or through the Public Works Loan Board, provided that the Government restrictions now in operation were taken off.
It is the height of folly that people should have to pay so much by way of interest for loans granted on a cast-iron security. On a loan of £1,600, running at 6 per cent. over twenty-five years, the payment is £125 a year, which means that by the time the purchaser has paid for the bricks and mortar he has paid £3,325. Even if the money is advanced at 5 per cent. for twenty-five years, it works out at £120 a year, which is over £3,000, practically double the cost of the house.
This is a crazy system of getting houses. Far from believing that we ought to go about bowing to building societies, I think that we ought to realise that they make a jolly good thing out of this system. It is time that people realised that this is a crazy system of


financing house purchase. We should do something to lower the interest rates if that is possible.

Sir Herbert Butcher: Can the hon. Gentleman give similar figures for local authority loans, say, at 5½ per cent.?

Mr. Skeffington: If the hon. Gentleman had been at our housing debates, he would have heard me and other hon. Members complaining that under the dear money policy of the Government it costs sometimes as much as £5,000 over sixty years for a £1,600 council house. That is equally crazy, but it is at least within the means of the Government to reduce the high interest rates for such a socially useful purpose as housing.
The Halifax Building Society attempted, in 1954, to come outside the closed shop and offer slightly more generous terms. It was encouraged by the Prime Minister at that time to do so. The Prime Minister made a speech—perhaps it was the kiss of death—in which he said that what Halifax did today let England to tomorrow. When the other societies were charging 4½ per cent. it kept its rate down for some time to 4 per cent.; but in 1955 the Lord Privy Seal spoiled all that. The Bank Rate was advanced still further and the 4 per cent. disappeared.
It is often said that apart from the fact that the building societies lend house purchasers the wherewithal they are a wonderful means whereby the small man can save. Let me get these facts on record. The Oxford Survey said, in 1952:
Only 4 per cent. of income units, owned building society deposits, and the average holding was just over £500; this compares with 16 per cent, of people who own bank deposits, 23 per cent. with Co-operative shares, 24 per cent. with savings certificates and 36 per cent. with deposits in the Post Office. Less than a fifth of building society deposits are owned by manual workers, or by people with incomes below £400 in 1952.
That was the position in 1952, and I have no reason to think that it is otherwise today.
I can see no justification for giving the building societies such preferential treatment of public funds. It is true that they have enabled people to get money which they could not get elsewhere to buy their own houses. It is like the man with a heavy load and a long distance to walk. He would rather travel in a horse and buggy than walk. I am suggesting that

in the twentieth century we should provide a streamlined limousine or, at any rate, a utility wagon which would help people to get along easier and more quickly.
I am glad that the Government are not to make these facilities available to all societies. I read year after year, in the Chief Registrar's Report, of the warnings that he has given to some of the smaller societies. The time has come when there ought to be a searching public inquiry into the building society set-up and their methods of financing what they do, and the proliferation of small societies, so that we can draw our conclusions as to their general state and how far they are an indispensable adjunct to society. I believe that they perform some service, which could be greatly improved and fairer to the borrower.
I have one thing to say about improvements. The Bill will make very little difference to the present situation, certainly for the ordinary tenants. It is an advantage that money will be available for the house purchaser, but it is astonishing how few applications there have been from landlords for improvement grants. Why is it? I am sure that it is because the landlord has to provide 50 per cent. of the capital himself. As the Ridley Committee pointed out, many years ago, there is a good deal of evidence that if landlords have to pay for improvements themselves those improvements are not carried out. Therefore, I imagine that the Bill will not make very much difference.
In so far as the Bill will enable anyone to have a house or to improve it, obviously one must welcome it, but it has been given exaggerated praise by the Minister. Perhaps that will not matter very much, because I hope that before many months are past there will be a Labour Administration, which will take hold of the Bill and really give it some teeth.

6.3 p.m.

Mr. Maurice Macmillan: I hope that the hon. Member for Hayes and Harlington (Mr. Skeffington) will forgive me if I do not follow him closely except to point out that although the Government may be able to control interest rates to some extent the building societies are entirely governed as to the rate at which they lend money by the rate at which they borrow it. I would also point out that it is not only the


smaller societies that have come under the disapproving eye of the Chief Registrar.
I would add my congratulations to those offered to my hon. Friend the Member for Ealing, South (Mr. Batsford). I have long been glad that, although he is a business rival, our firms do not directly clash. His speech now makes me glad that we are on the same and not on opposite sides of the House. I want my speech to be as short as possible and I will therefore make it clear that, though I am confining my remarks to Part I and have a great deal to say that is critical, I welcome the Bill in general.
I agree with some parts of the speech made by the hon. and learned Member for Kettering (Mr. Mitchison). I do not think I quite agree that considerations of trustee status should be relegated entirely to the Committee, nor with the conditions under which the Government are advancing up to £100 million for up to twenty years. The Minister pointed out that the whole of this scheme depended upon the concept of approved societies. I cannot quite see why the conditions of approval involve linking the loan with trusteeship status. It surely is not necessary to have trusteeship for a loan to be approved.
The conditions which are set out in Appendix I of the White Paper are those upon which money will be lent. The rules for trusteeship in Appendix 2 could easily be merely rules for prior compliance by building societies before they even got to the stage of agreeing to the conditions in Appendix 1. It will still be a two stage operation. The first stage concerns the conditions which building societies have to meet before being considered, and the second concerns the agreement which they must undertake. I can only presume that my right hon. Friend has taken this opportunity for including trusteeship in the Bill because he regards trusteeship as a good thing in general for the building-society movement. I cannot believe that it was necessary for the Government house-purchase scheme. It is true that trusteeship has long been wanted by the movement, but so far has been frustrated by lack of a satisfactory formula; but I doubt very much indeed whether the formula contained in the White Paper is satisfactory.
It is not known at all whether or not the mere granting to a society of trusteeship status will lead to a general accretion to its funds. If it does, it must mean a rapid expansion of the total assets of the society and will have a concomitant adverse effect on the reserve ratio. Surely it is not possible for a society's funds so to increase rapidly without this effect. If one looks at the rate of expansion over the last five years of the seven leading building societies it is obvious that two of the fastest expanding societies have the lowest reserve ratio and that the two with the slowest expansion rate have the highest ratio of free reserves. I should have thought that the obvious deduction was that any rapid expansion envisaged by the Government as a result of the trusteeship status will lead to this sort of difficulty. There are other limitations. If a building society does not have to limit the amount of expansion in order to preserve its reserve ratio, that may lead to other difficulties.
The Government have eliminated two thirds of the societies from trusteeship status because of size. I do not think that that should be considered a reasonable criterion. The Minister said he did not believe that limitation of size was the only criterion and that his method had included other standards. I notice that 500 out of 750 societies are so eliminated, although it is true that they handle only 3 per cent, of the total business. It is also true that the smaller societies are more local and individual. The hon. and learned Member for Kettering mentioned that the average figure of loans for pre 1919 houses was about 12½ per cent. I have not been able to find any evidence of it, but I think the tendency is for the smaller societies to do a rather higher average proportion of pre-1919 business.

Mr. Mitchison: If it is of any help to the hon. Gentleman, I will say that the figure came from an address delivered by the Vice-Chairman of the Council of the Building Societies Association. He put it as rather higher than 12½ per cent. The hon. Member will find it in the Building Societies' Gazette.

Mr. Macmillan: I thank the hon. and learned Member. I saw that, but I did not see any evidence that the smaller societies did, in fact, have a higher than average proportion, except that that seemed to be the general feeling in the movement.
The Minister mentioned that when the question of allowing trustees to invest in industry was concerned it was widely accepted that there should be a criterion of size. With great respect, I suggest that an argument which is applicable to a purely commercial undertaking is not necessarily applicable to a mutual undertaking. In fact, the whole tendency of the means my right hon. Friend has chosen to grant trusteeship status is an encouragement to building societies to adopt a more commercial attitude to their activities.
Whatever he may say about not wanting to give the impression that the smaller societies are not so good as the larger ones, I am afraid it is inevitable that that impression will get about. It should not, because many of the small societies, by prudent management and low working expenses, have succeeded in building up a better position than the larger ones, one or two of which are now in some difficulties. If the standard of soundness of a small society is reserve ratio I have a random sample of fifteen small societies which will not qualify. The reserve ratio varies between 3·6 per cent. and 14·8 per cent. compared with the 2½ per cent. which eventually is to be demanded. On the other hand, there are two large societies which only just make it under that standard, the Co-operative with 1·65 per cent. in 1957 and the Woolwich with 1·9 per cent.
It is the same if the liquid funds standard is taken as the criterion of soundness. The same sample of fifteen societies chosen at random gave a proportion of liquid funds between 8·7 per cent. and 17·3 per cent. as opposed to the 7·5 per cent. demanded in the White Paper.
In my view, the Minister is creating a sort of first and second division of building societies, to use football terms. To continue those terms, that is bound to have some adverse effect on the gate money. I cannot help feeling that the situation of some of the marginal societies is very unfair. There is the St. Helens and Rainford Society, for example, with assets of £410,000 and a reserve ratio of 3·6 per cent., the Glasgow Society with £418,000 and—perhaps coming a little nearer home—the Bromley Society which very nearly qualifies, but not quite.
There is an incentive to increase assets given to these marginal societies.

That must mean an incentive to increase profit by keeping up mortgage rates, which is giving a commercial rather than a mutual criterion to the organisation. One view taken of building societies' activities is that should pay a fair return for the investment and then do the maximum business they can with the available funds: rather than seeking to attract the maximum amount of money when conditions are right. It is possibly ironic that the Bill may well lead to less prudent management of some societies in an attempt to qualify under the size criterion and it may even lead to the demand for the maintenance of high mortgage rates to keep up a reserve ratio large enough to qualify for trusteeship status.
I wish to say a word about the reserve ratios. I hope that the societies, some of which I have quoted, with ratios above the average will not feel they can reduce them. If the Bill encourages some others to reduce their growth in order to qualify under the precentage of reserve ratios, that would be a good thing. Despite the additional requirements the Minister mentioned, I do not feel that 2½ per cent. of free reserves is really adequate, especially in view of the recommendation of the Building Societies Association that 5 per cent. should be the figure. I know that that recommendation allows for the book value and not the written down value of gilt-edged securities; but that is not an adequate reason for reducing it by half in the White Paper.
There is the danger that societies may qualify, or cease to qualify, even with the period of one year's grace after three years in the "first division." There is the additional trouble of how societies are to raise their ratio of free reserves from 1½ per cent. to 2½ per cent. in two years. If to do this they have to retard their growth, how can they take full advantage of the extra money that has to be made available to them under this scheme? If they do not retard their growth I cannot see how they can reduce mortgage rates without also risking not raising the ratio of free reserves in time. I do not know whether that consideration has had anything to do with the recent decision of the building societies on mortgage rates.
I understand, also, why 1½ per cent. was chosen as the initial figure for qualification. The fact that it is to rise to 2½ per cent. implies that it is inadequate. Therefore, the only reason I could see is that 1½ per cent. was fixed to allow some societies which would not otherwise qualify to qualify for trusteeship status. Nearly all the smaller societies are already higher than this level in their reserve ratios. Of the seven leading societies all except two are already higher than the reserve ratio. Only the Co-operative and the Woolwich are between 1½ per cent and 2½ per cent. Surely that is going to leave smaller societies to feel they have been excluded, however prudently managed, by a strict size qualification; whereas on the criterion of free reserves the Government have chosen to stretch a point and to include certain individual societies.
As with the size ratio, the question of reserves is surely made worse by this linking of the conditions for the loan with the qualification for trusteeship status. I had quite a lot to say about the terms in which the Bill is drawn and some of the dangers I see in it and the safeguards I should like to see, but, in deference to the hon. and learned Member for Kettering, I will leave that to a later stage in the career of the Bill.
I now want to say a word or two about the rate of interest. Of course, the Minister was right when he said that a fixed rate of interest for normal and other transactions of this kind cannot be paid by the building societies on money they borrow from the Government, but I cannot understand why that has led him to tie so closely the rates they have to pay to the rate which the Building Societies Association chooses to fix for mortgages on private houses for owner occupation, with a ½ per cent. differential. Under this scheme, all are to be charged at the same rate. Obviously, that is equitable. Societies cannot charge their borrowers less; and under the terms set out in the White Paper, they must not charge them more.
In effect, all building societies which wish to benefit by the scheme must follow the Association's recommendations. At the moment, these are recommendations only and it is left to the boards of individual societies to decide whether to adopt them. The fact that they nearly

all follow them does not alter the principle. There is no compulsion on them to do so. Under the Bill, however, the board of directors of a building society must follow the recommendations of the Association unless it is willing to discriminate against pre-1919 house purchasers or to maintain an unnecessarily high rate of mortgage to all.
The House has gone to considerable trouble to prevent manufacturers applying a joint sanction through a trade association to those who do not comply with the price levels laid down by that association. Now, in the Bill, the Government themselves are taking over the sanction, because they are in effect to reduce by one-fifth the total funds available to a building society for loan by withholding the Government loan from building societies which do not comply with the recommendations of the Association concerning mortgage rates.
There may be many reasons why it is necessary to keep up mortgage rates to obtain money for building societies to lend out. On the question of competition, I suggest to the Government that they would do better to examine again the highly subsidised rate of interest on National Savings, which is a competing source for the savings and investments that people might consider putting into building societies. I hope that when my hon. Friend the Parliamentary Secretary replies we can have some assurance on this and on other points which have been raised, not only concerning trusteeship status but also in relation to qualifications, both as to size and as to reserve ratio.
I beg my right hon. Friend the Minister to consider, even at this late stage, whether he cannot remove the link between measures designed to encourage home ownership and the conferment of trusteeship status on part of the building society movement. To me, the conferment of trusteeship status by a method which excludes two-thirds of the societies fails to do justice to the fine work which has been done by the movement as a whole.

6.23 p.m.

Mr. Michael Cliffe: I find it an ordeal to address this old and traditional assembly for the first time, and I hope that if I stray a


a little from the contents of the Bill it will be accepted that my intention is only to try to make the points I wish to raise.
I have the honour to represent Shore-ditch and Finsbury, two very ancient boroughs. They were, in fact, referred to by Charles Dickens. Until about twenty or thirty years ago, the conditions prevailing in both Shoreditch and Finsbury were very much like the days of Charles Dickens, until the Labour local authorities who took control were responsible for their policies. Now we see some marked improvements.
Part I of the Bill deals with the proposed loan of £100 million to building societies to enable people to purchase as their homes houses forty or more years old. One hon. Member has already said that the building societies are moneylenders. It appears to me that we are financing them to do a job that could be done better by the local authorities, which have a wealth of experience. Many Members of the House have gained tremendous experience as a result of their connections with local authorities. I refer particularly to the Minister himself. The town hall has now become the centre to which local citizens come with all their problems and difficulties.
The Bill means that a local authority has to lend up to 100 per cent. of the purchase money of which it will be allowed only 95 per cent. and must make up the difference. No provision is made for the granting of money for this purpose. Much could be done in this direction by enabling money to be advanced to the local authorities for housing purposes for periods at the discretion of the loans commissioners, repayment to be on a maturity basis and the rate of interest to be a realistic figure. This could easily have been done. It is generally accepted that the present high rates for loans fixed by the Treasury are keeping up an artificially high rate on the money market. These are problems and difficulties that the local authorities recognise, but to meet them they must make calls upon the general rates.
Part II of the Bill deals with the four types of amenities which it is proposed should be provided for the older type of house. These are
the provision of a bath, a hot water supply, and a water closet and satisfactory food storage in houses which lack these amenities.

I may be wrong, but there does not appear to be any interpretation of the relationship of these four items. Does the provision of a bath mean, for example, the fixing of, say, a shower in an already existing bathroom, or must a new bathroom be provided? If so, from one's knowledge of the houses that were built in about 1919 and earlier, one would regard this as a provision that would apply mainly to industrial dwellings. I should have thought that, generally, it would be extremely difficult to make any provision for the inclusion of a bathroom.
All of us would like to see improved that type of property of which we are speaking, but it is just that type that is in very much over-crowded areas, particularly in the industrial centres. The Bill contains no suggestion at all about how we are to deal with the populations affected by these improvements.
It would have been an excellent thing had there been in the Bill a proposal to withdraw from the Act of 1956 those parts that took from local authorities all subsidies except that for slum clearance. I can well imagine how welcome this Measure would have been if local authorities had had restored to them those subsidies. Lacking that, I fear that the Bill will suffer the same fate as did the Housing Repairs and Rents Act, I954, and the housing legislation of 1950. It will be recalled, too, that the only parts of the 1954 and 1957 Acts that were supplemented were those that gave the landlords additional rents. It will also be recalled that the landlords did not undertake the necessary repairs.
In central London we have acute difficulties. It is not generally known, perhaps, that about 20 per cent. of our properties have only gas as a means of lighting. Some of the older dwellings—what are called industrial dwellings—belong mainly to trust companies, and although tremendous pressure has been put upon the owners, the reason that they give for not installing electricity is that they have not adequate financial resources. It would have been excellent if that had been provided for in this Bill.
Had some financial assistance been given towards the cost of installing electricity in these dwellings, I am sure that there would not have been much objection. It is a scandal that in the very


heart of the Metropolis, where we so very often speak about a new age and where we talk so much of atomic power, there are houses with only gas installations, so that those who occupy them are denied the new electric gadgets that would take away some of the domestic drudgery. In addition, provision should be made for financial assistance to cover rewiring, and wear-and-tear repairs. I hope that the Minister will consider providing grants for these purposes.
There can be no serious objections to what is proposed, although I believe that local authorities ought to have the main responsibility in dealing with the matter, because I have no doubt that, in the ultimate, it is they who will have the headache. What I complain of are the things that are not provided for in the Bill. It may envisage certain practical steps, and those steps may be good, but they are by no means a substitute for housing, and ought not to be regarded as such. The only satisfactory way to deal with that problem is the restoration of the housing subsidies.
In Shoreditch and Finsbury we are permitted to build to a maximum density of 200 persons to the acre, but in much of the existing property we have a density of 500 or 600 to the acre. The only way in which we could, at present, remedy that position would be so to tackle the job as to lose one flat in three. If we are serious about housing, and I assume that the Minister is sincere and that these proposals are intended to help housing, I suggest that the only possible way of dealing with it is to restore the housing subsidies. That would enable us to provide accommodation for overspill populations who will be affected by this Measure.

6.38 p.m.

Sir Herbert Butcher: It is always a pleasant task to extend to an hon. Member who addresses the House for the first time congratulations in which one feels that one speaks not only for oneself but for those present in the Chamber at the same time. Certainly I count myself fortunate on this occasion to be able to extend to the hon. Member for Shoreditch and Finsbury (Mr. Cliffe) congratulations on his maiden speech.
In that speech, I detected the desire to conform to the rules of the House—to be brief, and to be non-controversial. I also detected the seeds of controversy which, I believe, we shall hear on some future occasion. I only add that if the hon. Member's future speeches are as well reasoned as that which we have heard this evening we shall have no complaint.
I speak as a director of a building society, and I was sorry to hear the hon. Member for Hayes and Harlington (Mr. Skeffington) describe those in the building society movement moneylenders, and in no way idealistic. He should direct his mind to the origin of this kind of society. Building societies, trade unions and the chapel all grew up together in a desire to enable the ordinary working men to improve their lot in various ways. Though their courses have diverged, the building society movement still has the same principle, which is to enable those who wish to do so to live in their own homes.
The societies, of course, have grown very much bigger, but the local interest is of the utmost importance and goodwill. It is not sufficiently appreciated how heavy a responsibility lies upon the building society movement to keep the balance fairly between the lender and the borrower. I confess that, having a certain amount of commercial instinct, I occasionally pull myself to attention before I enter the Abbey National boardroom and say to myself, "Remember, you are not going in here to make a profit. You are going to do exactly as fairly as you can between the two kinds of members of the society." The fact remains that, as my right hon. Friend mentioned in introducing the Bill, there is at present not enough money at the disposal of the building societies to go round. Therefore, this accession of assistance coming from the Government under Part I of the Bill is much to be welcomed.
I believe it is right—and here I disagree with my hon. Friend the Member for Halifax (Mr. Maurice Macmillan)—to link this question of trustee status for societies with willingness to lend on the pre-1919 houses. In another attractive maiden speech the hon. Member for Ealing, South (Mr. Batsford) referred to the fine structures which were erected some hundreds of years ago and which, in


the light of modern planning, are not in entire accordance with modern ideas. On those houses the building societies have not been able to lend in the past because of the shortage of money. Yet the people who live in those houses are in every way as creditworthy as those who desire to live in the more modern houses. It is very much a question of taste.
It is equally worthwhile bearing in mind that it is not possible to adopt the proposal of the hon. and learned Member for Kettering (Mr. Mitchison) and leave everything to the local authorities. It is not only the cost of council houses which is preventing them from building nowadays. In many cases it is the absolute unavailability of conveniently placed land. The houses on which the Government are now proposing to enable the building societies to lend occupy, on the whole, fine positions near the centres of towns.
That brings me to a point where I think the Bill could be improved. While the limit of £2,500 may be right for the vast majority of houses, and in the majority of districts. I think it is perhaps a little too low for the London area, bearing in mind the high cost of land in London. It might well be that this amount could be lifted in about the same proportion as the Ministry itself used in determining the appropriate limits in connection with the recent Rent Act. I appreciate that much could be said on this subject. I equally appreciate that, listening to the speech of my hon. Friend the Member for Halifax, there may be several Committee points on which we will not all feel in entire agreement with the Minister, but I think it is worthwhile pausing for a moment to consider what is likely to be the effect of this kind of legislation on the future of the building society movement.
This substantial influx of additional funds derived from the Government, additional control under the Registrar, and trustee status which is going to be of enormous importance and assistance to the societies, will necessitate much more skilled and competent management on the part of the building societies than ever before. It is of great regret that some of the societies with less than £500,000 assets will not be able to be accepted by the Government as worthy of this trustee status. But I am bound to say that just as at a certain period in the history of

British banks there were many amalgamations, I believe the introduction of this Bill will probably equally mark a period when there will be many amalgamations within the building society movement. The desire and opportunity to do the best for both classes, borrowers and lenders, is present in the minds of the boards of all societies whether large or small.
There is the practical difficulty that if a society is to be well administered it must have a good staff. If one has a good staff and wishes to keep it one must offer opportunities for promotion and advancement in accordance with ordinary ambition. Because of that it may well be that this will be the starting point for some amalgamations inside the building society movement. It will be regrettable if the local touch is lost. Provided that can be preserved. I think the newer, larger and stronger societies may offer better opportunities of promotion for the staff, and, indeed, greater security for the borrowers and lenders.
Part II of the Bill is a very workmanlike way of approaching the problem. It can be criticised as being rough and ready, but the answer is that it is ready and can be speedily applied. A large number of houses in this country, if they are dealt with promptly and put into happy, comfortable circumstances, can provide homes for people proud to live in them and willing to purchase them through the assistance of this Bill. This is a first-class Bill. I congratulate the Government on having introduced it, and I am not in the least surprised that the party opposite have no intention of dividing against it.

6.47 p.m.

Mr. Thomas Steele: The hon. Member for Holland with Boston (Sir H. Butcher) began his speech with a very sincere and well merited tribute to my hon. Friend the Member for Shoreditch and Finsbury (Mr. Cliffe) and I should like to associate myself with his remarks. My hon. Friend the Member for Shoreditch and Finsbury mentioned houses built in the time of Charles Dickens. I want to speak of houses which were built before the days of Charles Dickens, in which some of my constituents are still living. My hon. Friend the Member for Lanarkshire. North (Miss Herbison) will, no doubt, have more to say about them in her speech.
The hon. Member for Holland with Boston, in the course of a thoughtful speech, mentioned the necessity for skilled and competent management of building societies. I hope to say something about that later, but, first, I should like to mention a small point which the Minister raised. He drew attention to the fact that under Clause 5, and Clause 20, which applies to Scotland, if a local authority refuses to give a grant to an applicant under the improvement provisions the applicant may, if he so desires, obtain a written explanation of the refusal of the grant.
This is the provision which, I think, was put in the Housing (Repairs and Rents) (Scotland) Act, 1954, and which, perhaps, we thought was substantial at that time. I have had experience of the working of this obligation upon local authorities. I hope to return to this point during the Committee stage of the Bill. When an applicant has been given a reason why a grant has been refused, what resource has the applicant to a further authority if, in his view, the local authority is giving misleading information about the reason why it has been refused? That is a small point, but I mention it now because of the importance which the Minister attached to it.
All of us in Scotland would very much welcome any provision which enables new or better housing accommodation to be provided for the people of Scotland. If any part of the British Isles requires that improvement, it is certainly Scotland. I do not think that the Bill will bring those improvements. I do not think that it is a Bill which can possibly bring those improvements.
I have been discussing this matter with certain insurance people who have the responsibility of deciding whether or not an applicant will receive a grant for a new house under the present provisions. I was interested to hear the figures given by the Minister. He said that if a man with an income of £13 a week was able to put down a deposit of £140, and paid £12 15s. per month, that would, in effect, enable him to get a house valued at £1,800. I very much doubt whether that would be so. On those figures, £12 15s. is almost a quarter of his monthly income. But that is not the end of the story. There are all the other commitments for Schedule A and other things and, as my

hon. and learned Friend the Member for Kettering (Mr. Mitchison) said, there is also the fact that in the majority of cases a big repair bill will have to be met if the house is to be habitable at all. These figures should be considered.
From my conversations with insurance people who deal with this matter, the reason they do not give the grant is not because they do not have the money; it is because they are unwilling to lay an obligation upon people in this way because they are confident that it cannot be met. What I think might happen under the Bill is that they will give an impetus to something which my hon. and learned Friend the Member for Kettering mentioned. One would imagine that building societies are not giving loans for houses which were built prior to 1919.
My hon. and learned Friend stated that the Halifax Building Society is making large advances for this purpose. I know what is happening in my own constituency, where, unfortunately, there is a lot of old property. Much of it is tenement buildings and not in a very good state of repair. The local authority is unable to do anything, and I say to the Joint Under-Secretary, who is interested in solving Glasgow's overspill problem, that what happens is that the local authority rehouses those people and houses are being sold to Glasgow people who do not understand or appreciate the circumstances.
A person who is involved in this matter in a big way is a man called Mr. McClughan, with offices in Bridge Street, Dumbarton. He is the owner or agent for a great amount of property in my consituency and also, I understand, in the constituencies of my hon. Friends the Members for Greenock (Dr. Dickson Mabon) and Hamilton (Mr. T. Fraser).

Mr. Thomas Fraser: We sacked him.

Mr. Steele: My hon. Friend says that he has been sacked. After what I have said tonight, I hope that the other people concerned will do the same.
The unfortunate thing is that, through the operations of this gentleman, people are being offered houses and are buying houses at present and it has now become clear that he is not interested in selling houses to people who can afford to buy them; he is interested only in selling


houses to people who cannot afford to buy them. This racket has been going on for some time. What happens, in effect, is that he sells the house, gets a deposit and after the person who has bought the house fails to keep up those payments he is evicted, and the process starts again. He is obviously working within the law, but the unfortunate thing is that he will not deal with the law.
I will give one example of what is happening. A farmer in Dumfriesshire had a faithful and loyal servant, but, unfortunately, because he had to sell the farm and, because the new occupant wanted the house for himself, he had to tell the employee that he would have to go. This employee thought that he would like to come up to my part of Scotland. In a local paper he saw an advertisement for houses for sale. He looked at a house, thought it was all right, and went back to the farmer and said that it was satisfactory. To help the employee, the farmer said that he would put down the deposit, would pay his removal charges and would ask his own solicitor to make the necessary arrangements.
The man left Dumfriesshire, came to my constituency, and took occupancy of the house before the arrangements were made. When he arrived at the office of Mr. McClughan, the following week, and wanted to make the arrangements, as soon as he told Mr. McClughan that the farmer's solicitor in Glasgow would make all the arrangements he was shown the door and told to get out of the house. Mr. McClughan was not prepared to have anything to do with the solicitor. This man, his wife and family went to the health department of the local authority and were rehoused by the local authority.
This is not the only case. It has happened on a number of occasions, and I can tell the House that the local authority would like to get rid of Mr. McClughan. This man sells the houses, by instalments. Having sold them, he acts as agent for the collection of the instalments. Then he appoints himself as factor or agent of the property. I find that, in certain cases, where the new owner of the property has paid the rates to the local authority, this man has collected sums of money in instalments actually for the rates. This has had to be challenged.

Mr. E. G. Willis: Has he his own private building society?

Mr. Steele: My hon. Friend anticipates what I am going to say. I am coming to that. This man even increases his own salary as factor without consulting the owners of the property, although there is a provision about that laid down in the title deeds.
With great seriousness, understating the facts, I say that this man is absolutely unscrupulous. That is moderate language, certainly not like the language used about him in the area from which I come.
This gentleman has a door plate which indicates that he is the local agent for the Halifax Building Society. I am not sure whether these things are being done under the ægis of the Halifax Building Society or not. My hon. and learned Friend said today that the Halifax Building Society was lending vast sums of money for this particular purpose, but the book which Mr. McClughan uses, in which the instalments are recorded, is of the kind which can be bought at Woolworths for 2d. It is very difficult to get any satisfactory information at all about him. When I advise people about writing to him, they are unable even to obtain a reply. If this man is operating his scheme on behalf of the Halifax Building Society, then the Halifax Building Society ought to know something about it. I can say that the Halifax Building Society is being associated with him because he is known as the local agent for that society, and the names of this man and of the society stink in that area.
This is a racket. It is a racket which might even go further under the operation of the Bill. There is a maximum amount of money which can be lent, but there is no minimum amount. As far as I can gather, the decision about whether money will be lent or not depends upon the building society. According to the speeches we have heard and to what the Minister said, the building societies will lend money if the applicants are worthy people—" credit-worthy "I think was the phrase—

Miss Margaret Herbison: Perhaps I can help my hon. Friend. The exact words were "creditworthy borrower".

Mr. Steele: I thank my hon. Friend for recalling the exact words. The impression was that money would be lent if the applicants were credit-worthy borrowers and sound in that way.
As far as I can see, there is no guarantee or provision that any building society will not be unable to do the sort of thing which is being done in my area. If a building society wishes to make a loan in such circumstances, what is there in the Bill to prevent it? Who decides whether a person is credit-worthy or not? Surely it is the building society. If these things are happening in my constituency at present, then, having regard to the number of properties in Scotland now empty and the number in respect of which these things could go on, we have a grave responsibility in Scotland to ensure that safeguarding provisions are inserted in the Bill.
What I have already told the House is a clear indication that the proper method for doing it, if it is to be done, is not by way of the building societies at all but through the local authorities.

7.5 p.m.

The Secretary of State for Scotland (Mr. John Maclay): The hon. Member for Dunbartonshire, West (Mr. Steele) has raised some interesting points. As to the last of them, I do not think that he will expect me to go into detail about the various charges he made against an individual firm. I listened to what he said with the greatest interest, and it may well be that some ventilation of the problem is desirable, but I think that it would be wrong for me to attempt to follow it up in any way on the information available to me and with the short notice I have of it. I do not think that he would expect me to do that.

Mr. Steele: I appreciate what the right hon. Gentleman says, but I am sure that. having heard what I said and having just said what he has, he will accept that some inquiries should be made. I hope that he will brief himself on the matter with a view to making a further statement.

Mr. Maclay: In the latter part of his speech, the hon. Gentleman suggested that some steps should be taken to enable control to be exercised over building societies lending money in such conditions, if such conditions exist, and that I will certainly look at. I think, however, that it is a Committee point which we shall have to examine very carefully, because the principle of the matter is that building societies, through all their

history, have shown themselves extremely able and competent at discovering who are credit-worthy borrowers. That is one of the great advantages of the particular system which we propose.
The hon. Gentleman raised another point about an applicant for an improvement grant who had notice in writing stating why he would not get a grant. As I followed the implication of his argument, it was this. Has the man any right of appeal? If not, what is the point of having it in writing? I suggest that the main point in putting it in writing is that it lets the man know why he has not got his grant, and gives him a chance of conforming to the conditions which would make it possible for the local authority to give it to him. That is obviously very much better than just having a blank refusal and not having any idea why the refusal has been given.

Mr. T. Fraser: Is not it likely that the letters now saying why a grant has not been given might lead to litigation? They could not under the earlier provisions of the Scottish Act because the local authority had a discretion as to whether or not it would give a grant; nobody could advise the local authority to give a grant. Now the local authority must give the grant in certain circumstances. Could not the letter now lead to litigation?

Mr. Maclay: I think that the hon. Member for Hamilton (Mr. T. Fraser) has a point there which we shall want to examine to see whether anything like that could arise under the new provisions. Again, this is something which may well be followed up in Committee.

Mr. Willis: The right hon. Gentleman will not be on the Committee.

Mr. Maclay: The hon. Member for Edinburgh, East (Mr. Willis) will realise that, strong as is my desire to answer every possible question on every possible subject on every possible occasion, it is not always appropriate for me to try.
Before I come to the detail of what the effect of the scheme will be in Scotland, I will mention another point raised about whether the £1,800 house could properly be the subject of action under the Bill, having in mind the theoretical man with the weekly wage of £13. There


is room for argument as to who should or could properly be expected to fulfil all the conditions necessary to make it a safe proposition, but there will be many houses well below the £1,800 level which will come under consideration, particularly the pre-1919 houses. I do not think that £1,800 is necessarily the figure on which one should base all one's thinking, because there may well be many cases coming below that figure.
Now may I go on to say something about the Bill as it applies to Scotland? In its essentials, the Bill applies to Scotland just as it does to England and Wales, and I am not proposing, therefore, to go again over a lot of the ground which my right hon. Friend the Minister of Housing and Local Government covered in opening the debate. I shall not have much to say about Clauses 1 to 3, which deal with the proposals to facilitate house purchase. The only point which I should explain there is that, while both the Minister of Housing and Local Government and the Secretary of State for Scotland are empowered to make advances to approved building societies, it is proposed that the Minister should make arrangements with building societies incorporated in England and Wales, and the Secretary of State with building societies incorporated in Scotland.
In practice, this will mean that in some cases the Minister will be advancing money to English societies lending to Scottish borrowers, and, of course, vice versa, because the whole operation is thoroughly tangled up as between England and Wales and Scotland. As the building societies are organised on a United Kingdom basis, it would be impracticable, for administrative reasons, to differentiate between English and Scottish loans made by individual societies; it is obviously simpler and more convenient to have provision for each Minister to deal with his own group of societies, so that no one society has arrangements with the two Ministers. That is why we have made the provisions now in the Bill in the way we have done.
I have not much to add about these Clauses. The need for measures to encourage house purchase in Scotland is, if anything, even greater than in England and Wales, because of the lower proportion of owner-occupation in Scotland.

Less than 300,000 houses out of the Scottish total stock of 1·6 million are at present owner-occupied. These are as accurate figures as I can get, and the reasons for that position are historical. I think that some of the historical reasons are beginning to change, and I believe that we shall all wish to see a much higher proportion of houses in Scotland occupied by their owners than we have at present.
I should now like to refer to the Scottish provisions for improvement grants which are contained in Part III of the Bill. Although the provisions relating to standard grants to private persons are the same in Scotland as in England and Wales, there are certain differences in the other improvement grant provisions as they apply in Scotland. For this reason, the Government thought that it would meet the general convenience if the Scottish improvement grant provisions were incorporated in a separate part of the Bill, even though this means repeating in Clauses 19 to 23 much of what is said in Clauses 4 to 8.
The scheme of standard amenities, as my right hon. Friend has already explained, will meet a need that has become very apparent in the operation of the existing provisions. The amount of grant which local authorities in Scotland have undertaken to pay from the inception of the scheme in 1949 to date is approximately £5·2 million on the improvement of some 17,300 houses; that is. an average grant of about £300 per house.
It is worth while analysing these figures a little further. An analysis of the grants paid by local authorities over the last two years shows that over 60 per cent. of the improvements have attracted grants within the £300 to £400 range, 20 per cent. within the £200 to £300 range, and 14 per cent. within the £100 to £200 range. All the houses so far improved with the aid of grants have, with very few exceptions, been modernised up to almost new-house standard.
Many owners must, however, have been deterred from undertaking improvements because they knew beforehand that this standard could not be achieved except at a prohibitive cost. That is really the moral that we can draw from these figures—that there was grave need to do something more effective without


involving the owner in excessive expense. The new scheme will give them an opportunity to bring houses without the basic amenities up to a reasonable standard of habitability at a cost which they can afford.
I do not want to go over the same ground as that which my right hon. Friend covered when he opened the debate, but I will at this stage point out that the duty of local authorities to make standard improvement grants is the same in the English provisions as in the Scottish provisions in the Bill. The handling of applications for standard grants and the amount of standard grants as well as the change in the period of the conditions from twenty years to ten years also apply to Scotland, as they do to England. There are, however, a number of points that I should like to mention particularly, which my right hon. Friend did cover, and which have no application to Scotland, and to say why this is so.
The first, on rents of improved houses, is referred to in Clause 12 of the English part of the Bill, and the second is the change in the basis of the grants for local authority improvements. If I can deal straight away with the point about the rents of grant-improved houses, I will deal with the other one a little later in my speech. My right hon. Friend explained the effect of Clause 12 and the kind of case with which it is intended to deal in England and Wales. Our position in Scotland in the matter of maximum rent of grant-aided improved houses is very different, going back as it does to the original provisions of the 1949 Housing Act.
I will not detain the House with a detailed description of the Scottish position in this matter beyond saying that, as a good many hon. Members know, where a house has not been let in the preceding five years, the maximum rent is fixed by the local authority, and in other cases, the maximum rent is the last rent increased by 8 per cent. of the owner's expenditure in respect of improvements. This question has been considered very carefully, and after discussions with the local authority associations we concluded that it was not possible to find at present a new basis for fixing maximum rents for improved houses in Scotland. For this reason, no Scottish counterpart to the

English Clause 12 appears in the Bill. It leaves the matter where it was under the Act of 1949. I should add that it may well be that, after the revaluation in 1961, we may have to look at this again, but I thought I should give a short explanation of this part of the English Section of the Bill and say why it does not apply in Scotland.

Mr. James McInnes: Surely, the local authorities whom the right hon. Gentleman has consulted were very emphatic in their attitude that there ought not to be any alterations. I am surprised that the right hon. Gentleman, having accepted that advice, now indicates that we shall have to review the matter again.

Mr. Maclay: I said that it may well be that after the revaluation a matter like this would need examination, but we cannot tell until we have revaluation. Clearly, a new set of circumstances may well arise at that time.
In addition to this proposal, which will not apply in England and Wales, the period during which the conditions have to be observed is changed from the present period of twenty years to ten years. We are proposing that the general conditions of ownership and occupancy of improved houses in Scotland should be changed and brought into line with those applicable in England and Wales. The conditions now in force in Scotland require that an improved house must be occupied by the owner, a tenant or a member of the agricultural population in pursuance of a contract of service. We are proposing to extend the provisions so as to allow occupation without breach of the conditions by a member of the owner's family or a person who, on his death, becomes entitled to an interest in the house. The Bill also includes provision, for application in Scotland as well as in England and Wales, to allow the sale of an improved house by the applicant for grant after a period of three years from the time when the conditions began to apply.
We are also removing the conditions with regard to voluntary alienation—and for the benefit of any non-Scots now in the House who do not know what it means, I should say that it is the sale or transfer of a house in certain circumstances to another person—which are peculiar to the Scottish code and might


involve the owner in liability to repay the grant. These provisions were originally enacted in the Housing (Scotland) Act, 1949, which may have been applicable, and I do not think I need to go into the circumstances of that time. Now, after nearly ten years, a great volume of additional housing accommodation has been provided—

Mr. Willis: Privately owned.

Mr. Maclay: —and we consider that the conditions that made the voluntary alienation conditions necessary have now largely disappeared. It is only fair that the Scottish owner should now be placed on the same footing as his counterpart in the rest of the country. As I have said, in both countries sale will be possible after a period of three years without breach of the conditions of the grant.

Mr. Willis: Surely this Part of the Bill applies to all the property which has been rehabilitated and modernised? Surely that has not been added to in recent years?

Mr. Maclay: No. Of course that is not the case. I have been trying to discover, if the hon. Member wants me to put it crudely, why the party opposite made this peculiar provision in 1949. I was charitably trying to understand their motives without going into excessive detail about it. I really think that it is true that they must have had their minds conditioned at that time by the number of houses then available, and that this was the estimate they made of what they then could do to deal with that total stock of houses available. In the years since then the total stock has increased, and we feel that some of the dangers, which may have been contemplated by hon. and right hon. Members opposite, and which made them put this provision in then and which is a definite hardship which Scotland has, compared with the rest of the country, have gone, and that it is only right and fair that we should correct this anomaly.
Lastly, I think I should explain that we are retaining the existing basis for the calculation of the Exchequer subsidy payable on improvements undertaken by the local authorities themselves, and therefore there is no mention of this in the Bill. We do not need to touch anything there. Under the current arrangements the amount of subsidy is based on the estimated annual loss and takes into

account such varying factors as the cost of acquisition, the estimated cost of improvements, the estimated life of the property after improvement, the estimated future rent, and the current long-term rate of interest.
In Scotland the sort of houses which local authorities have to improve are mostly of the pre-1914 tenement type, of substantial, stone construction, and it is an expensive undertaking, and the cost varies considerably, depending on the amount of adaptation or reconstruction required. Again, after very careful consideration, we reached the conclusion that the present arrangements are more suited to the special Scottish conditions than the new system which it is proposed to introduce for improvements carried out by local authorities in England and Wales. This was discussed with the local authorities, and the decision I have announced has their full support. I think it is a real advantage to us in Scotland, bearing in mind the special type of housing we have got to deal with.
I do not wish to go on any longer than necessary. I have tried to cover the main differences in the Bill. However, I would say this. The 1951 census showed that at that time there were in Scotland over 600,000 houses—I am ashamed of this myself—without a fixed bath and about 500,000 households who had no indoor W.C. or who shared one. That position has considerably improved since then. One cannot give the figures without another census, but the position has improved.
Every hon. Member will agree, however, that there is still a great deal to be done. It is really hoped, and I have every reason to believe, that, in spite of some doubts expressed by hon. Members on the other side about the effects the Bill will have, the simplified scheme of grants —and simplification is extremely important in this matter—and the relaxation of the conditions for making the grants, and the financial assistance to be given by the building societies will encourage owners to modernise their properties and achieve a notable improvement in housing conditions in Scotland. I have every hope we shall achieve a considerable improvement by this Bill.

Miss Herbison: There is a clarification I should like to have. The right hon.


Gentleman was quoting figures for grantaided improvements. As far as I could hear, he gave a figure of over 17,000. I have here the latest Housing Return for Scotland, dated 30th September, 1958, which indicates that the total, including private and local authority houses, is 12,489. I wonder where the difference comes in. It is important that we should know.

Mr. Maclay: I am afraid I should have difficulty in giving a snap answer to that. I will try to find the answer and to make it available to the hon. Lady if necessary.

Mr. William Ross: Here is a fundamental point. The right hon. Gentleman ended by telling us of the disgraceful conditions of pre-1919 houses, saying there were so many hundreds of thousands without baths and W.Cs. Will he give me a categorical answer to this question? Will he say whether this money to be given to the building societies is to enable people in Scotland to buy those property liabilities from slum landlords?

Mr. Maclay: The hon. Member is picking up the same point I dealt with at the beginning of my speech. He realises very well that the intention is to improve properties, and, where right and proper, people will buy what is right and proper and it will be possible also to do improvements under the Bill. I would only say to the hon. Member that by this we can make real progress, and that the fears he has expressed in that respect are not right.

Mr. Ross: Disgrace to Scotland.

7.25 p.m.

Miss Elaine Burton: I wish to raise a matter which I think is of particular substance to many people in this country, and I hope that if I can prove my case tonight I shall have the support of hon. Members on both sides and of the Minister, as I am quite sure I shall have the support of the public outside.
On page 6 of the White Paper there is a sentence with which my entire speech is concerned. I am sure that the Minister knows in advance which sentence that is, but I quote it to him:
A society entering the scheme will undertake by formal agreement, in return for receiving Government money on the terms set out

above, to grant to any borrower who, in the opinion of the Society is creditworthy, a mortgage for the purchase….
I have known for a good many years that a definite prejudice exists on the part of certain building societies against the granting of mortgage loans to women. A friend of mine went, about five years ago, to the Abbey National Society to make application for a mortgage. She was aged 45, her salary at that time was £1,000 per annum, and it was with complete bewilderment that she learned that this application had been turned down. After the Abbey National, she went to various other societies, of which I have not got the names, and received the same answer. Being at a loss to appreciate the reason she asked her bank manager why this could be, and she received the answer, "Well, of course, it is because you are a woman."
At that time I had no means of raising this in the House, because it did not seem to me that I could attach any Government responsibility to such a decision. I have had to wait until the Queen's Speech of this Session. In that Speech we learned that it was to be Government policy during this Session to make loans to building societies for the conditional granting of mortgage loans to would-be borrowers for houses of pre-1919 construction. To make the case more strong from my point of view, the Queen's Speech went on to talk about enhancing
the freedom and status of the individual.
On 12th November last there appeared in The Times a statement of which I should like to quote only two paragraphs:
A spokesman of the Building Societies Association, whom the Government consulted in framing their plans, admitted yesterday, that although there is no hard and fast rule prescribed in building society practice, women are discriminated against simply because they are reckoned to be less credit-worthy. The societies argue that a man's future can be predicted with more certainty over a long period of years than a woman's.
If a woman in search of a mortgage is young the society must take account of the fact that she may soon change her circumstances by marriage, when the husband will not be legally liable for repaying the loan. If she is less than young, the society must bear in mind "—

Mr. William Hamilton: Less than young? What does that mean?

Miss Burton: I do not know. These are the words of the society.
If she is less than young, the society must bear in mind that she may retire, even from a well-paid job, earlier than a man.
These conditions would seem to apply against the young and the not so young, as well as against he married and single. It escapes my comprehension what type of woman would be exempted from that rather inclusive category.
The Times was optimistic—as I was— in assuming that the Chancellor of the Exchequer would answer a Question which I had put down for the same week. It seemed to me that a Question concerning Exchequer policy might properly be addressed to the Chancellor. As he did not wish to answer it, however, he got rid of it to his right hon. Friend the Minister of Housing and Local Government, and it will probably arrive on the Order Paper tomorrow, after a delay of six weeks. This delay, which caused me a good deal of annoyance at the time, has enabled me to acquire a considerable amount of factual information, which I shall be able to lay before the Minister tonight.
I wrote to the President of the Building Societies Association—the Duke of Devonshire—because I thought it my duty to lay before him the extreme concern of women's organisations at the apparent has shown by some building societies in connection with the granting of mortgage loans. I heard from the Secretary of the Association, Mr. Garratt-Holden, that the matter would be raised at the meeting of the Council of the Association on 12th December last. I have not yet had a communication about it, but, wishing to be scrupulously fair, I should say that it may be awaiting me at this moment— although I would have thought that it had had time to arrive before now.
On 10th December a letter from Mr. Garratt-Holden appeared in The Times. It refers to two matters which are very relevant to what I am saying. First, the Secretary of the Association says:
The necessarily condensed account of the conversation which your Political Correspondent had with a spokesman for the Building Societies Association (published in your issue for November 12) contained the words ` discriminated against, in reference to women applicants for loans, although these words were not used by the spokesman and certainly do not represent the attitude of building societies.

I was not present at the discussion, but there are three comments that I want to make on that point. The original item appeared in The Times on 12th November, but it was not until about three weeks later that any refutation reached me and, I believe, the Press. I submit that three weeks is a long time for an error so great to go without being refuted.
My second point is that it is not the custom of The Times to be lax in regard to quotations from associations. Thirdly, if the poor, unfortunate spokesman did use the words "discriminated against", he spoke very truly.
The letter in The Times went on to supply a statement on behalf of the Association, as follows:
Whether to make an advance and, if so, how much to lend to any particular applicant on the security of any property is essentially a matter for the directors of each building society to determine.
I appreciate that. It would obviously be covered by the agreement.
The statement goes on, however, to say:
Subject to this, the Association believes that the policy of most of its members is to treat a woman applicant for a loan in exactly the same way as a man if she is in regular employment and earning a sufficient income. In such cases there is no discrimination on grounds of sex and no male guarantor is normally required.
That statement is not true. If I wished to be ultra-polite, I could say that it is incorrect, but I feel strongly about the matter. It is not a true statement, and if the Secretary of the Association believes that it is—and presumably he would not have so written if he did not believe it— he is living in a world of make-believe or in one of his own imagination.
I wish now to show the House the reasons for my statement. Here I find myself in some difficulty, and I believe that every hon. Member will appreciate my position. Certain people have written to me giving me definite information on which I could speak tonight. They have no wish to have their identity revealed either to the House or to the public. We all appreciate the very great help that we receive from the Press on these occasions, and we know that its detective work is in many instances first-class. I am, however, particularly anxious that the names of these people shall not come out.
One or two of those who have written to me have mentioned the names of local building societies, or local branches, and if I gave them they might aid the tracking down of those who have written to me. But I shall try to be fair. I have a good case, which there is no need to exaggerate, and if the House will bear with me I want to give proof of the good faith in which I make these accusations.
I have a very big file on the subject, and I thought that the only way in which I could present this matter to the Minister tonight was by trying to make him realise that it concerns people living all over the country. I shall not give particulars of the cases in detail, but I have eleven of them and I can tell the Minister, without giving the actual dates of actual cases, that while two are recent, but I have no actual date, others occurred in I943, 1951, I952, 1954, and 1956—and there were four cases in I958. I will start with the North—excluding Scotland. I would never venture to go into Scotland.

Mr. Hannan: Why not?

Miss Burton: Because I should not have sufficient courage.

Miss Herbison: My hon. Friend would be very welcome.

Miss Burton: First, I want to deal with a case from the city of Durham. It concerns a single woman who, acting on the advice of her solicitor, asked the Bradford Building Society for a mortgage of £1,000. Her statement reads as follows:
Although I was teaching in a permanent post and receiving the maximum salary for a woman they insisted that I should have a man's signature to my agreement. From all the information which I could solicit, it was of no importance whom I asked—his occupation was asked for, but the question of financial backing did not arise. His responsibility seemed to be nil. Should I default, he was not under any obligation—should I die before the agreement was completed, he could not automatically assume my place. His was merely a male signature.
My second case comes from West Hartlepool, and concerns the Halifax Building Society. My information says:
I applied to the West Hartlepool branch of the Halifax Building Society for a loan … My.application was refused on the grounds that I was a single woman and I was informed that the case would be renewed if I could produce a male guarantor.

I come now to a case from Carlisle, from where my informant writes:
About six weeks ago my sister and I were discussing the possibility of raising a mortgage… A married sister enquired of the secretary of the "—
blank—
building society about the prospects. The reply she received was that the society did not lend money to women. She pointed out that we were single, both in superannuated jobs—one Civil Service, one nationalised industry, but apparently this made no difference.
My last case from the North comes from Sunderland, where I am told that one of the women known to me there was refused a mortgage without a male guarantor some years ago by a reputable local building society. I can assure the Minister that the letter goes on to say that the name and particulars can be supplied to him if necessary.
Now I come nearer home, to the Midlands, to Northampton. My informant from Northampton says:
I was refused a loan on these grounds"—
the grounds being the demanding of a male guarantor.
I was a depositor in this Society and no investigation of my financial state was made at all. No man, no money.
That, I think, puts the case rather pithily. The letter goes on:
The same thing happened to a friend of mine, but I have no knowledge of which society refused her.
Now we move to Leeds, where I am told that there a woman was prepared to pay half the purchase price of a house, yet a society would not advance a mortgage without the brother of this person standing as guarantor. The brother was a married man with many commitments, while my friend in Leeds lived alone, had no dependants and ran a business of her own. I am assured that the name of the building society could be produced.
I come now to Oxford, but I am not dealing with a building society in Oxford itself—I wish to make that quite clear. From Oxford a person writes to me that she made inquiries of this building society about a mortgage:
The man gave me all the details of their mortgage service, including the statement that is was necessary for a single woman to have a male guarantor to enable her to raise a mortgage. I approached another building society … and the same thing was said about the guarantor.


Now I come to something which I consider even more important. I have here a letter from someone who works for an insurance society. She tells me—I hope that the Minister will note this—
A superintendent midwife in the Midlands already with good endowment life assurance, took a £1,000 endowment in 20 years, paying the first annual premium of £52 1s. 7d., for the purpose that at such time as a suitable property was found she would use the policy for house purchase or building society mortgage. When her father died in May, 1952, she had a transfer appointment early in July to her home town … where her invalid mother had decided on a house. In mid-September, before the second premium was due, she returned a policy to the company with a letter stating that she 'had no wish to carry on the policy as it will not be accepted for a deposit on a house or as part mortgage by the building societies.' She told me she was misled in taking the policy since she could not get any building society to give her a mortgage, being a single woman.
My informant, who works for this insurance company, went on to say:
On my reporting this a confidential note came to me. '… it is unnecessary … to remind you that building societies usually require a woman applicant to provide a male guarantor for the amount advanced'.
I am quite sure that the Minister will have had brought to his notice the issue of the Birmingham Post and Gazette, dated 10th December, in which Mr. E. J. Wilson—whom I do not know—the Secretary of the Birmingham and District Property Owners' Association, said he understood that discrimination did exist to the point of women being asked to supply a male guarantor when they sought a mortgage. If the Minister has seen that newspaper, and has noted the article, he will have realised that of all the women's organisations approached by this Birmingham paper every one was solidly in agreement that this discrimination did exist and that male guarantors were asked for.
I wish now to deal briefly with cases in the South. First, I come to somewhere near London, where a person known to me writes:
I decided to buy a place of my own
with another friend sharing.
In spite of the fact that our combined incomes amounted to over £1,000, we were unable to obtain a mortgage without a male guarantor even from the larger building societies.
From the South-West—as the place is rather small I do not propose to give the name—I have received a letter which states:

My sister, who is a member of the profession of estate agents, has told me that out of three applications for mortgages two had to be supported by a male guarantor.
My last example comes from Kensington—not exactly a Labour province. The person who writes to me is not a member of my party. She says:
I myself was recently shocked to be told that I should be refused a mortgage loan although I hold an apparently secure and well paid job simply because I am a woman.
That concludes the case I am making for single women against male guarantors. To put it most kindly, I think that the House would agree that it makes nonsense of the statement by the Secretary of the Building Societies Association which I quoted earlier, that the policy of most members of the Building Societies Association
is to treat a woman applicant for a loan in exactly the same way as a man if she is in regular employment and earning a sufficient income. In such cases there is no discrimination on grounds of sex and no male guarantor is normally required.
In addition to the case of the single woman, I wish to draw the attention of the Minister to something a little more difficult, the case of the widow. I have here a letter from a Lancashire widow —the Minister cannot complain that I am not going fairly well round the country. I wish to read sections of this letter, because I think it important. I am a Yorkshire woman, but I think that both Lancashire and Yorkshire women speak bluntly, and this letter is simple and straightforward.
I am a widow and I hold a senior executive position with my company as office manager. My salary works out at the rate of £12 a week and I am guaranteed my full salary for a period of six months during illness. A few months ago I approached the manager of the local branch of the Halifax Building Society for a mortgage.
She goes on to say—and I think that this is of particular interest—
I was well within the credit-worthiness required by building societies, i.e., that the client is able to earn in one week an amount at least equal to the monthly premium and outgoings payable. At £12 per week I was well within this. Furthermore, I was also able to provide references from my employers as to my status, and salary—from my bank manager and from prominent people in the town. Nevertheless, I was told by the branch manager that unless I was willing to obtain a male guarantor the mortgage would not be allowed, that it was no use my even filling in an application form. He assured me that there was no way round this as it was a rule of the society.


The manager even added that the previous month a woman school teacher had been in the same position and the society had refused to grant her a loan unless she found a male guarantor. That is the case of my widow.
There are only two examples of married women that I wish to quote. The first concerns the Woolwich Equitable Building Society. The married woman I have in mind made application there, but the society would not even hear of it. She tells me that her name was crossed off the proposal form and her husband's inserted in its place. When she asked why this was so, she was told that a woman could not take out a mortgage with the society.
The last case which I wish to quote concerns a woman in Oxford, who writes as follows:
My secretary tells me that three years ago she wished to apply for a mortgage and applied to various building societies. The first was to "—
I do not wish to name it, because it is a small one. The second one was
to the Halifax and the Abbey National, which refused to grant her a mortgage without her husband as guarantor. As the house was being built with her money, and the leasehold was in her name, this seemed to her unfair and unreasonable.
I would end on that eminently reasonable note and finish my quotations.
I think that, in view of what I have said tonight, I am not being unreasonable when I ask the Minister whether, when conditions come to be finalised as to the granting of these loans to building societies, we might not ask that such conditions shall include a statement to the effect that any building society, so approved, shall guarantee that a woman applicant for a loan shall be treated in exactly the same way as a man if she is in regular employment and earning a sufficient income and that in such cases there shall be no discrimination on grounds of sex and that a male guarantor shall not be required. It would seem to me, going back to the letter of 10th December in The Times, from Mr. Garratt-Holden, that as he is in complete agreement with me about the desirability of this being the case no difficulty should be envisaged in writing in such a condition.
Concerning the widow, I realise that it is not good practice to argue from a particular case to general cases, but in the case that I have quoted it is obvious that a guarantor should not be required there either and I would ask that this matter be looked at. As for the married woman who wanted a house to be built with her money, and where the leasehold was in her name, surely such out-of-date ideas might at least be allowed to pass away. I have tried to be very moderate, but I submit that I have made out an unanswerable case against the male guarantor for a single woman who is credit-worthy. Every fair-minded person would agree that these ideas are unfair, stupid and belonging to mediaeval times.
I also want to speak about something which I think is serious and about which I think we would all agree. It would be quite wrong if the taxpayers' money were allowed to be used for any purpose that involved sex discrimination. I have proved tonight that this does exist in some building societies. I want to be fair. I am quite sure that there are some branches of the big building societies which make this mistake perhaps unknown to the headquarters office. but the remedy lies with the headquarters' officers. However, this does exist in some societies and some branches of some of the national societies. As I explained earlier, I have been in some difficulty regarding identity of cases, but I have to give my information on this matter, and the House has been very patient.
I say to the Minister that although I would be reluctant to do so, I am perfectly willing to show these letters to him, including the ones from which I have quoted, if this may be in confidence. I would show them to him as evidence of the good faith on which I have made these accusations, which cover the entire country. I would ask him to treat these accusations accordingly and to demand that there shall be a guarantee from the Building Societies Association that, on its part, it will do everything possible to ensure, and will ask its member associations to agree, that there shall be no sex discrimination in the granting of mortgage loans arising out of money lent to them by the Government.

Mr. H. Brooke: I would not for a moment doubt the hon. Lady's good faith. It would, however, be helpful to have the dates of some of these cases.

Miss Burton: I think that the Minister did not catch what I said at the beginning of my speech. I gave the dates in general. I am willing to bring the letters to him, when he can see all the dates.

Mr. Brooke: The cases differed from one another and I do not know which case applied to which date.

Miss Burton: I hoped that the Minister would not, because I did not want my informants' names to be revealed.

7.56 p.m.

Mr. Donald Sumner: I am very glad to be called after the speech of the hon. Lady the Member for Coventry, South (Miss Burton), for two reasons. One is that I can support in general terms what she has said. I am very pleased to do so. I have had instances brought to my own attention. I think that it is particularly hard on young widows who are otherwise fortunate enough in having means to get houses but who are refused for no better reason that one can see than of their sex and the difficulties which it may be thought that brings in train with it.
The other reason I am very glad to follow her is because I want to focus attention on a rather different aspect of the word "creditworthy". I shall keep the House for only a few minutes, as I know that a number of other hon. Members wish to speak and it is getting rather late.
When I was last fortunate enough to be able to speak in this House on the subject of housing it was about a year ago. I referred then to the difficulty which all people were finding in embarking upon house ownership at all because of the economic position. The general answer then was, of course, that one could not protect one particular section of the community from the general economic position. That was an answer which I think one had to accept at the time.
I am therefore particularly glad now to be able to welcome a Bill of this sort which creates such a big advance in the general housing situation. I mentioned then—and no doubt it was very obvious —the difficulties that young people were

having. It seems to me from a general view of the matter, and from the view of those who come to me in my constituency, that the balance has rather swung and it is now elderly people who are finding most difficulties.
This is quite likely to be some effect of the Rent Act and that these difficulties will clear away in the process of time, but there will still be contractual tenancies coming to an end. These older people are considered not credit-worthy not because they are not earning good money at the time but simply because of their age. It seems to me that this is one of the problems which really remains in the housing field. I think it right to say that the normal requirement is that the last repayment should be made by the age of 65 and the terms of this Bill seem to envisage a 20 year loan, so it does not directly help older people, or those who are not really old but are about middle age. We all wish to overcome this difficulty and to make house ownership as widely enjoyed as possible.
The first way in which it can be done is to examine the way in which local authorities handle their housing lists. My own authority does not allow people on the list who have an income exceeding a certain amount. If we are to help older people it is essential that loans should be taken up by those who are credit-worthy. If all those who are credit-worthy remain on the housing lists that will react to the detriment of those who are older. Before anyone is granted a council house I should like to see an investigation into why he cannot get a loan under the existing provisions and the provisions of this Bill.
I wish the hon. Lady the Member for Coventry, South had told us what those ladies whom she mentioned did after they had been turned down by the building societies and whether they went to the local authorities and what effects that had. We should then have had a picture which covered the matter as a whole.
There is another matter of importance. Someone who has to deal with these things and knows better than I do about them thinks that local authorities would be in a better position to help the older applicants if allowed to take a collateral form of security, like an insurance policy. That is a point to be put to my right hon. Friend in Committee.
When my right hon. Friend speaks of London I hope he speaks of it in the same context as in the Rent Act. If the figure of £2,500 is to be extended I hope that it will be to the same area as is covered by the Rent Act.
I found myself in some agreement with the hon. and learned Gentleman for Kettering (Mr. Mitchison) when he said that more of this work might have been put into the hands of local authorities. I do not quite know why I should agree with him unless it is because we occupy the same building, one for the purposes of work and one for residence. I have nothing against building societies. I believe they perform a very valuable function, and I say this not because I do not want building societies to be helped in the way proposed by the Bill but because I want local authorities to be used to the fullest extent for loans, running their efforts in this field parallel with their ordinary work in housing. I give a very hearty welcome to the Bill and in particular to Part I which extends the scope of house ownership.

8.3 p.m.

Mr. Cyril Bence: I am sorry that neither the Secretary of State for Scotland nor the Joint Under-Secretary of State are present because some of my remarks will be applied particularly to Scotland. I have all my life believed, and so have the majority of my party, that it is very desirable to encourage families to own their own houses. I come from South Wales, where owner-occupation is a great tradition. We believe that a landlord is a monkey on the roof and we do not want a monkey on the roof if we can help it, because it can be a very wicked monkey.
We should be careful how we encourage young people to take upon themselves burdens which they cannot fulfil. A Bill enabling people to acquire houses on 100 per cent. mortgage if built before 1918 gives me great concern, and I am very worried about it. People can get a loan or grant of £250 to bring the house up to modern conditions, which may mean that they have to spend another £150. if young people are so credit-worthy that they can envisage the prospect of spending £150 as well as undertaking a mort-

gage, they should go in for a new house and not an old one.
One of my hon. Friends mentioned a Mr. McClughan. I do not want to mention any names and I do not know whether the gentleman I am thinking of is Mr. McClughan, but I know that houses are changing hands in Clydebank. A young man came to me and said he had bought a house for which he was paying £2 a week. He had not been in it long when he complained to the local authority about damp, and all the rest of it. The sanitary engineer made an order that he should get these repairs done. When the local authority told him that he was now the owner and must get the repairs done, he asked me whether he would be justified in not paying his rates because the local authority would not do the repairs. He had been talked into paying £2 per week for a number of years and within three months it looked as though he was going to be pushed into repairs costing about £200. I hope that the Secretary of State will give me some answer on this question.
I have looked through some of the legislation. I see that in the 1950 Act, and I believe in the 1949 Act, the granting of a mortgage on a property will include all the burdens which are part of the tenure of the property, like feu duty and ground rent, but exclusive of other burdens. I am assured that in Scotland today unscrupulous factors are selling property to tenants who are in occupation. There is one case where a young couple will have paid about £600 over ten years, and when the payment is finished they will find a bondholder behind that property. Those young people will have to satisfy that bondholder by redeeeming the bond duty before they can get the deeds of their property.

Mr. Willis: And pay the legal expenses.

Mr. Bence: And pay the legal expenses.
Is there not a danger in the Bill that some young people may be misled into purchasing these properties, not realising that at the end of the day there is a heavy bond to clear off? No building society will give an advance on the value of property when the valuation includes a bond. The Bill quite clearly says that the loan will be granted up to 100 per cent. mortgage on the valuation of the house or the price, whichever is the lower.


We know that in present circumstances the valuation of property is very much higher than any local authority valuer would have accepted.
I do not say that the Minister is motivated by this, but I have no doubt that many owners of property who have not carried out repairs may follow this line. They look upon the properties as a burden. They were built before 1918. This Bill seems a wonderful instrument, not to enable young people to own their own homes but to enable property owners to get rid of something which has become a burden. I am convinced of that. All of us know many property owners who have tried to get rid of their properties but there is no market for them. Anyone who has the cash to put down would not buy a house built before 1918. They would buy houses built since the last war, or just before, because they can get advances from building societies.
Unemployment in Scotland is now up to 95,000, and it will be difficult to find among the wage earners those who are considered credit-worthy. How in the present Scottish situation of employment building societies are to assess creditworthiness, I do not know. They can find the credit-worthy only among the top executives, and I am sure that they will not go in for buying houses built before 1918. If they are really credit-worthy and in good secure positions they are selling houses which they occupy and around which local authority houses have been built and are trying to buy houses further out away from local authority houses.

Mr. Harold Gurden: The hon. Member said that buyers could not be found for these houses, but now he is saying that people are selling them.

Mr. Bence: They are trying to sell them and cannot. There is a tenement house opposite where I live which has been advertised for sale for six years. The owner is a top executive of a large engineering company and the house is in a road which used to be a highly attractive residential quarter. Now it is surrounded by local authority houses and he cannot get a price for it. That house was built before 1918. It may be that he will sell it now—I do not know— but, if so, he will have to sell at a very low price because of the environment. I

do not agree with his view on the environment because I think the environment of working-class people is very fine and better than that of those in the top flight, because working-class people are more warm-hearted.
Does not the Secretary of State for Scotland agree that what is needed in Scotland is not the financing of building societies or of local authorities to enable people to buy houses built before 1918 because the vast majority of them are tenements, and those which are not tenements are nothing like up to modern standards. This Measure will do nothing at all to increase the amount of housing and the number of houses necessary to Scotland today. After all is said and done, what person who has a security and who is really credit-worthy and able to see twenty or thirty years ahead is going to buy a house which is more than forty years of age? Of course they will not buy these houses.
Working-class people will be talked into buying these houses which may need £300 or £400 spent on them in repairs in the next five-years. They will be talked into taking on a burden which in a few years they might not be able to carry. They will be involved in repayments over twenty years, plus repairs and rates, amounting to anything from £3 to £3 10s. a week. We should work that out with the 6 per cent. for repairs which will be entailed and the Measure going on the Statute Book to give building authorities and dean of guild courts powers to compel owners of property to bring their property up to standards laid down by the building authority. We may be asking young people who have committed themselves to 6 per cent. for twenty years on £800 or £600 to spend £300 in bringing the property up to the standard of modern amenities.
It is not sufficient to say that up to £250 can be granted. People have come to me almost in tears because they have been asked to pay £20 in road charges and they have not got it. With this Bill going on to the Statute Book young people trying to raise families may be enmeshed in a burden they cannot bear, and that is dangerous. The worst thing we can do is to burden working-class people with years and years of debt. It is debt which breaks up families and creates misery in the home. I beg the Secretary of State and the Government


to be wary of how they burden young people with debt on property which should have been pulled down and new homes built in its place.

8.16 p.m.

Mr. Michael Clark Hutchison: I listened to the speech of the hon. Member for Dunbartonshire, East (Mr. Bence) with interest and did not agree with any of it. When we in Scotland buy houses we generally see what the burdens are and what the proposition is. We are not such fools as to purchase a house blindly.
I wish to congratulate my right hon. Friend on introducing the Bill. It is an excellent Measure and will do a great deal to bring about home ownership by many people, old and young. What delights me is that the Bill is in accordance with Unionist principle and shows that the Government wish to help all sections of the community.
My speech is going to be short, and when I say "short" I mean it. There is one point I should like to raise. No doubt it might be dealt with in Committee, but there is a principle involved and I should like to ask my right hon. Friend about it. Clause 20 says that the standard grant shall be approved provided the building is likely to last for fifteen years or more. It may happen that a local authority might be very willing to give this grant but considers that the building will not last that number of years. What happens where there is a conflict, when the applicant says that it will last for that time but the local authority says that it will not?

Mr. Bence: It is some house if it will not last for fifteen years.

Mr. Clark Hutchison: Is there to be a right of appeal or not? I suggest that it would be fully in accordance with our party's philosophy if there were a right of appeal by the applicant to the sheriff. I do not ask that my right hon. Friend should give an answer now, but I should be grateful if he would study this question and incorporate a right of appeal in the Bill between now and the Committee stage.

8.18 p.m.

Mr. Donald Wade: It is clear from the interesting debate which we have had that the Bill

deals with three distinct items of policy: firstly, the granting of trustee status; secondly, the provision of loans by the Treasury to the building societies to enable mortgages to be provided for pre- 19I9 houses; and, thirdly, the alteration of the rules relating to improvement grants.
There may be some political or administrative reasons for dealing with all these subjects in one Bill, but I think that it leads to some confusion, and I should have preferred to have seen the important subject of trustee status dealt with in a separate Bill. The only comment I would make on Second Reading concerning trustee status of building societies is that I agree with some of the remarks made by the hon. Member for Halifax (Mr. Maurice Macmillan). The limit of £500,000 assets will exclude some of the smaller building societies. Obviously, some conditions must be laid down and the line must be drawn somewhere, but it is a little unfortunate that some of these very sound, smaller building societies should be excluded from trustee status. I would rather have had a somewhat lower limit and stiffen the provisions concerning reserves. The question of reserves is most important and I have raised it on other occasions when we have talked about building societies.
The Bill recognises the value of the building society movement and with that I have no quarrel. Any criticisms which I have to offer are not directed against the building society movement or against the idea of home ownership. As a Liberal, I welcome the extension of home ownership. We must look forward to a change in the pattern of ownership. My view is that there will be more owner- occupiers. There will always be some people who wish to rent their accommodation and that will be provided partly by local authorities, partly by private landlords and partly by housing trusts.
I would like to see housing trusts encouraged. In future, I do not expect many people with a small amount of money to invest it in house property, as they have done in days gone by. There will, I think, be a gradual and steady increase in the number and proportion of owner-occupiers. The Bill will help in some respects, but we must get it in the right perspective.
The grim truth is that home buyers have had a difficult time ever since the war. There has been a shortage of houses and high prices, due partly to the shortage and partly to inflation. More recently, there have been high interest rates and undoubted difficulties in obtaining mortgages. Already in this debate, the Deputy-Chairman of the Building Societies Association has been quoted. I should like to quote further from him, from some remarks he made to a conference of National Registered House Builders, reported this month in the Building Societies' Gazette. After pointing out that the investments in building societies had fallen off during the years 1956 to 1958, he went on to say:
During this same period a number of local authorities ceased lending altogether, because they could only do so at what they regarded as a penal rate of interest. Insurance companies cut down their lending in many cases in favour of other forms of investment. At the same time the banks were directed to cut down their lending, and trust funds could he better employed in the purchase of gilt-edged, with the prospect of substantial capital appreciation in due course. You will see that there has been a reduction in the flow of funds from every source available to the would-be house purchaser, because of the prevailing monetary conditions. In practice, therefore, during the past three years, the climate has been very discouraging…" 
He did, however, go on to say that the position was improving and that more funds were flowing into the building societies, but I think it is fair to say that on the whole, home buyers have had a rather difficult time.
The Minister was just a little overoptimistic in referring to his Bill as the greatest Measure ever. He seemed to be expecting a great upsurge of electoral gratitude. I was reminded of the man who for many years maltreated his wife and who, when he finally ceased to do so, said, "Why are you so ungrateful? You ought to be very thankful that I have stopped hitting you." I hope that this indicates an intention on the part of the Government to stop hitting the home buyers.
I have purposely used the expression "home buyers" rather than "house sellers", because there is some distinction between the two. Encouraging home buying is not quite the same thing as encouraging house selling. There have been references to 100 per cent. mortgages. During the autumn of this year

there were some inspired statements to the effect that the Government were coming out with a scheme for 100 per cent. mortgages, backed in some way by the State. I understand that the Labour Party also has advocated 100 per cent. mortgages. I have always felt rather doubtful about that proposal, partly because it is a good idea that the buyer of a house should have some financial stake in it from the outset, but also because any widespread adoption of 100 per cent. mortgages would, in my view, lead to an all-round increase in the price of houses. It would inflate the market value.
There are only two sets of circumstances in which 100 per cent. mortgages would not have that effect. There might be private arrangements between a seller and a buyer whereby the seller agrees to lend back the whole of the purchase price. That is their own affair. Secondly, local authorities may grant a 100 per cent. mortgage to a tenant who wishes to buy. In that case, all that happens is that the tenant pays a little bit extra every week and starts buying the house. I see no objection to that, but I would like to know what exactly the Minister envisages when he refers to the local authorities granting 100 per cent. mortgages.

Mr. Mitchison: It is just for this sort of reason that we in the Labour Party included in our pamphlet, which I commend to the hon. Member for purchase and attention, a provision in that event in favour of the house going to the local authority on the first refusal.

Mr. Wade: I appreciate that, but I still have doubts about the wider application of 100 per cent. mortgages. Today, therefore, we must ask ourselves whether the 95 per cent. building society loans will have the same effect. A great deal depends upon the valuation. During this interesting debate, insufficient attention has been paid to the valuations that will be made before these mortgages are granted. A good valuer will not only look at property carefully, but will also make recommendations about repairs which are required.
The would-be purchaser would be well advised to hear what is said about the property by a valuer before entering into a contract. Unfortunately, some buyers sign a contract before going to a building


society to apply for a loan. They will then find, maybe, that the amount of the grant is not based on the purchase price they have agreed, but on the valuation. The public should understand that this 95 per cent. loan is to be on the valuation or on the price, whichever is the lower, and not necessarily on the price the purchaser has agreed to pay.
I hope that the Minister will correct me if I am wrong about that. It would be a great mistake to try to make political capital out of this Bill and, in order to gain electoral popularity, to give the impression that anybody who wants it can get a 95 per cent. mortgage. In the long run, that would do more harm than good to would-be home buyers. I would sum up my views on the danger of inflating prices by saying that local authority advances up to 100 per cent. should be limited to their tenants, and great care should be taken over valuations on building society mortgages. I think that the building society movement is well aware of that.
I return, for a moment, to the smaller building societies. Some will not qualify for the Treasury loans, but it seems a little unreasonable to rule them out for reasons of size. Even though it may be thought necessary to apply all the tests before granting trustee status, I do not think it necessary to apply the test of size in relation to the utilisation of the Treasury loans in order to lend on the pre-1919 houses.
The Minister may not be willing to lower the level for trustee status, but there is a case for lowering the level for the purpose of these Treasury loans, although, obviously, other conditions must be applied. I would not suggest that these loans should be available to all societies, unconditionally, but some of the smaller societies are quite well qualified to lend on the pre-I919 houses, they know the local conditions, and the creditworthiness of the borrower. It is an anomaly that that condition should be imposed.
There is another anomaly. It seems ironical that the taxation policy of the Government should handicap the smaller societies. The imposition of Income Tax and Profits Tax on surpluses has the effect of making it more difficult to build up reserves and, therefore, for the smaller

societies to reach trustee status. It is also a handicap on the larger societies, because, as I see it, one half of one per cent. will, roughly, cover working expenses. It will not lead to any increase —certainly, not any material increase— in the reserves.
It will, in fact, have an adverse effect on the reserve ratio, and here, perhaps, I may quote very briefly the chairman of the taxation committee of the Building Societies Association. He said:
… in the case of a society which takes up its permitted maximum of Government loans, namely one-fifth of its assets, its reserve ratio will drop by one-sixth …
I hope that the Minister will pass on these observations to the Chancellor. I recognise that by this Bill we cannot very well alter the taxation of building societies, but it is illogical that the Government should lend money to the societies in order to facilitate their expansion and, at the same time, tax their surpluses in such a way as to curtail their expansion.
I calculate that if we were to revert to the pre-1932 position—in other words, if we were to abolish both Income Tax and Profits Tax on surpluses, the building societies could make an immediate reduction of half of one per cent. on mortgage interest rates, in addition to any other reduction in interest rates that they may be contemplating in the near or the more distant future. A taxation policy that curtails development and makes it more difficult for building societies to build up reserves, really does not fit in with a policy of lending more money to them.
Improvement grants are a subject that we can discuss in greater detail in Committee. We must keep in mind the point that I made earlier—that we are trying to help home buyers, not, primarily, house sellers. I think that the term of three years contained in Clause 11 is rather too short a period after which to allow the owner to sell, and gain the whole benefit of the grant. I should have thought that a longer period would have been reasonable, but that, perhaps, can be discussed in Committee.
I hope that the Committee stage will be taken on the Floor of the House. The Bill affects many people. It affects those who have money to invest, those who are buying their homes, and owners and tenants who wish to make improvements to their property. I hope, therefore, that


the whole House will have an opportunity of discussing the Bill in Committee. When it reaches the Statute Book I hope that it will help in some measure those who wish to become owners of their own homes. I hope, also, that it will help all occupiers, whether owners or tenants, of these older properties who at present have not the essential amenities of a comfortable home.

8.36 p.m.

Mr. Harold Gurden: The House will have noted with great interest many of the remarks which have been made by the hon. Member for Huddersfield, West (Mr. Wade), but I hope lie will forgive me if I do not follow him in his speech except to indulge in a brief summary, since time is passing quickly. I would say that, broadly, his real criticism is that the Bill was brought in by a Conservative Government. Apart from that, he supports it fully.
It seems to me that the chief criticism of the Bill from the other side of the House is that it proposes to use the existing agencies, the building societies, as the vehicle for easier home purchase. It has been asked why should building societies he helped when, indeed, they have said that sufficient funds are available. Sufficient funds may have been available in many quarters at the rates at which building societies have decided to lend. They lend at 65, 70, 75 or 80 per cent. according to what funds are available. But if it is proposed, as it is in the Bill, that 95 per cent. of the valuation should be available, obviously the building societies will want some backing.
We on this side of the House understand why the building societies are not liked by the Opposition. Some time ago the right hon. Member for Ebbw Vale (Mr. Bevan) said that building societies were mere moneylenders; he said it in a derogatory sense and not, as I would say it, in a complimentary sense. However, I do not want to occupy the time of the House for too long, so I have deliberately omitted much of what I would have liked to say about the Bill.
May I ask my right hon. Friend to take it from me that I and many of my friends are very grateful to him for bringing this Measure before the House so quickly, and for the way in which it is

drafted. I, for one, did not expect the improvement in the grants to exceed the level at which they are proposed in the Bill. I think that they will be extremely helpful. We believe in home ownership because it is much better that the individual shall own the property, and not the local authorities. Many of us believe that the local authorities are not the right people to own the houses, and neither is the nation. We believe that the people who live in them should own the houses. I am very disappointed to learn that only one-third of the houses in the country are owned by people who live in them. I hope and believe that the Bill will go a long way to make it two-thirds. I would rather see it at that figure.
In the Midlands, houses are not owned in this proportion. Unfortunately, local authorities own far more houses there than local authorities do in the rest of the country. The trouble in Birmingham, for instance, is that people have very little option but to live in a council house. The council house system is not satisfactory. It is difficult to exchange a house. One may live in a council house which is 10 or 12 miles away from one's work. The Birmingham City Council exchange system is unwieldy. Practically, it does not work at all. I get many letters from people who badly need to change their house. Home ownership will give people the chance to sell their houses and buy another house nearer the place where they wish to live.
A terrific load is being thrown on the streets of Birmingham, which are already choked with traffic at peak hours. I often think, probably wrongly, that the problem is worse than in London. Many people in council houses who wish to move are in fear of losing their homes, and this Bill may help them. It would help a good deal more if the councils would sell their houses to the people who live in them. As I said a few minutes ago, the people who live in the houses are the right people to own them, not city councils. The Birmingham City Council does not sell any houses to the occupiers; it refuses to do so. Since it owns most of the land in Birmingham, and probably half the houses, the people of Birmingham are faced with great difficulties.
There are old-aged people whose children have got married who are probably in a three-bedroom municipal house but are occupying only one bedroom. This is most uneconomic. We in Birmingham have more houses per head of population than ever before. The system of municipal landlord is not satisfactory. It is unwieldy and the council cannot properly manage the number of houses which it owns.

Miss Herbison: The hon. Member referred to old people who live in three bedroom houses when all they need is one bedroom. Old people like to have their families come and stay with them occasionally. Why should old people have to live in a house with only one bedroom and be deprived of the pleasure they get from having their families stay with them?

Mr. Gurden: To some extent, I agree with the hon. Lady, but I am going only by the number of letters which I get from people saying, "We do not want this size of house". I have them on my files at the moment and I will willingly let the hon. Lady see them. I never receive letters the other way round. These people complain that the local authority will not give them exchange facilities to a smaller house. I am not blaming the Birmingham authority too much because it tries, but the matter is too large.

Mr. Mitchison: I am sorry to interrupt the hon. Member, but he will remember that it was his party which prevented the introduction of arrangements by which exchanges could be facilitated. Exchanges are at present held up only too often by the landlords' unreasonable refusal of consent. When we tried to eliminate that, the hon. Member's party divided against it.

Mr. Gurden: Perhaps the hon. and learned Gentleman is putting a valid point, but the complaints I get concern local-authority-owned houses. In most of the other cases landlords are willing to help in the exchange of houses.

Mr. John McCann: Oh, no.

Mr. Gorden: I am speaking from my personal experience. I have yet to hear of a landlord refusing to help my constituents in this way. The local authority does not refuse either, but it is so slow.

Many of my constituents have been waiting years to exchange their house. Living accommodation is not economically used. No local authority could possibly handle the number of houses which have to be controlled and, at the same time, give satisfaction to all tenants.
I suggest that it would be much better if the houses were owned by the people who lived in them and if the local authority in Birmingham, for instance, would offer their houses for sale to the tenants. It would solve the problem of the ratepayer who is having to subsidise, through the rates, people who live in municipal houses and who are better off than he is himself. It would certainly help people to buy their houses at a reasonable price. Then, if they wished, they could probably sell them and move nearer to their work. It would certainly help the finances of local authorities.
Many local authorities have houses standing on their books at £300, £400 or £500, which they could quite comfortably sell, without hurting the purchaser, for £1,400, £1,500 or £1,600. This would be a way to help local authority finances and enable them to have more money to build more houses. There is no need for difficulty. The help it would give to the ratepayers would be tremendous. One of the biggest complaints on this subject I have from old-aged pensioners is that they are having to subsidise people living in houses owned by the local authority when there is, perhaps, £30, £40 or £50 a week coming in. That is a genuine complaint; they have to do that.
The trouble is that my right hon. Friend has not been able to include in the Bill a Clause under which we could see to it that local authorities sell their houses to tenants who wish to buy them.

Mr. Ross: Will the hon. Gentleman say whether he will vote against the Bill, in view of the fact that the improvement grant is a subsidy?

Mr. Gurden: No, I certainly shall not vote against the Bill. After all, the improvement grant will help some of the people who have been subsidising the municipal property tenants.

Mr. Ross: Who will pay for that?

Mr. Gurden: It is about time that they had a little out of it.

Mr. Ross: And the people in the municipal houses will pay for it.

Mr. Gurden: It is only 25 per cent., I understand, which is to come from the ratepayers.
We know that the Opposition would have it that houses must be owned by the municipal authorities. This Bill expresses the essence of Conservative policy, and we ought to go as far as we possibly can in seeing that every occupier has a chance to buy his own house.

Mr. Ross: A slum-owning democracy.

Mr. Gurden: There is another advantage in the Bill, and I should have thought that the Opposition might be attracted to it because of their anxiety to have a policy for the aged. If we can ensure that local authorities offer their houses for sale to the occupiers, and encourage people to buy their own houses, how much better it will be for elderly people who are trying to live on a pension in the years to come. In fifteen or twenty years' time, they will have no rent to find. We ought not to underestimate the value of the Bill in that respect. I hope that my right hon. Friend has drawn the attention of the Minister of Pensions and National Insurance to this asset. If two-thirds of the people, instead of one-third, own their own houses, the pension problem in twenty years' time will be very greatly relieved.

Mr. McCann: The position in the cotton towns today is that there are literally hundreds of houses which people have bought as an investment against old age, but, because of rising unemployment, those people have had to move out of the town and go somewhere else to find work. Now they cannot possibly sell the houses because there is no one who can afford to buy them.

Mr. Gurden: I have an idea that Wednesday will give a better occasion to debate that matter. However, if these people have bought their own houses and, some years ago, entered into contracts with a building society or a local authority to borrow the money, probably 70, 80 or 90 per cent., at least they have an asset. [HON. MEMBERS: "No."] They will. I expect that they are asking too much money for it, because it is quite clear, if I accept the Opposition's argument, that houses are still in short supply. But I

will try not to be side-tracked again, or hold up the debate any longer, because I should like other hon. Members to have the opportunity to speak.
Finally, I would say that we can all look forward, I hope, to the Chancellor of the Exchequer supporting my right hon. Friend's policy for home ownership and making this easier by removing the Schedule A tax when he presents his next Budget. If he does not do that, and if the Opposition, as they claim they will, win the next General Election, perhaps they will help us. May I add that we ought not to forget another matter while dealing with this, and that is the problem of leaseholds. If we are to help the purchasers of old property we shall have to consider some way or other of getting rid of the difficulty of short leaseholds, as against freeholds or the long leaseholds of 999 years.

8.51 p.m.

Mrs. Joyce Butler: I regret that I cannot take up the points made by the hon. Member for Birmingham, Selly Oak (Mr. Gurden), because what I want to say has to be confined to about five minutes, and, therefore, I shall have to summarise my remarks.
I want to stress to the Minister that there is a real dilemma on the part of those of us who have welcomed—and I do welcome—his statement that local authorities will now be able to advance 100 per cent. mortgages to would-be home owners. I have been very keen on this for a long time, and the Minister will remember that I put down a Question to him just before the Recess, asking if he would consider making such a policy possible. What I had in mind particularly was that 100 per cent. advances would be very valuable to some of the people on housing waiting lists who could not possibly be accommodated by the local authority because of the shortage of council houses. The local authority knows these people very well. It knows their income, and also that the only thing that holds many of these people hack from purchasing houses is that they cannot get the deposit together.
The Bill will be a real help to people in that category, and to people who have known from the inception of the Rent Act legislation that their landlords would seek orders for possession under the


decontrol provisions, and who, since the Rent Act was first introduced until the present time, have had a sufficient period in which to weigh up all the pros and cons of home ownership and to calculate whether they can afford to become home owners or not. To these people, too, I think it will be very valuable; but what distresses me is that there are many others who are being forced to become home owners, whether they want to he or not. They are being compelled to take over this burden—and home ownership is a real burden—because of the Minister's own policy with regard to the Rent Act.
I have watched very carefully in the last few months the workings of the Landlord and Tenant (Temporary Provisions) Act, which, we were assured, was going to make things very much easier for these unfortunate people. I have been to the county court myself, and have heard a judge give a landlord an order for possession in four weeks' time against a tenant of 61 years of age, because, he said, the tenant had not made sufficient attempt to buy his own home. This case is a typical one. At that time of life, this man, an ordinary working man, with a daughter living with him, and two relatives of similar age to himself, is now scouting round trying to find a building society that will lend him the money to buy a house. I do not think that man should become a home owner. He does not want to be, but he is being forced to be one. If the Minister will look through county court cases of the last few months he will see that there are many more of these instances in which people are being forced against their will to buy houses.
I have had some experience of this sort of thing in a quite different connection. I refer to the Anglo-Egyptian Resettlement Board. If the Minister will look at what it has done he will find that many refugees from Egypt have been helped by the Board with deposits to put down on the purchase of houses. He will find that now many are coming back to the Board to say that they must give up the houses which they have started to buy because they cannot keep up the payments and cannot meet the responsibilities for repairs and so on.
There is a good deal I should like to have said about this aspect of the problem, but there is not time to do so. I just

want to touch on the problem of the local authorities in making advances for home ownership. I shall be very brief. I want to support what has already been said, that the Minister should have put into the Bill some provision to give local authorities the same facilities he is giving to building societies in the raising of money. It has been pointed out that the conditions under which local authorities raise money are much harsher than those which the Minister is now offering to the building societies. But even if the money were available from the Public Works Loan Board on the same terms art which the building societies are getting it from the Government, it is extremely difficult for local authorities in fact to get money from the Public Works Loan Board at all. As it is, they have to pay more than the building societies will have to pay in the rate of interest. If the Minister is serious in wanting to enable the local authorities to make 100 per cent. advances, he should look at this again to see whether he can do something about it.
There is the further consideration that building societies can pay off loans at will without a penalty clause, whereas local authorities can pay off only with a penalty clause—that is, what the Public Works Loan Board would consider to be the amount of the loss of the interest.
There is another matter which I do not think has been mentioned so far, and which affects the problem of local authority finance. Local authorities in recent months, when they have had to make financial advances, have had great help from the trustee savings banks, and have been able to raise money from them. The National Debt Commissioners have recently relaxed the 10 per cent. liquidity ratio which the trustee savings banks had been required to observe, and have given them discretion as to the ratio they should maintain. Therefore, they have run down the ratio by calling in 7-day money previously lent to local authorities. This is an important point.
I quote now from the Municipal Journal on a further aspect of the matter:
The National Debt Commissioners have also instructed trustee savings banks that mortgage advances to local authorities must not exceed two-thirds of the banks' total investments. These initiatives are clearly designed to encourage the trustee savings banks to go into the market for short-dated Government


securities—a worthy objective but one which should not be attained by damaging, as is being done, one of the sources from which the local authorities have been deriving considerable resources.
There is very much in this point, but I have not time to elaborate it. I would ask the Minister to consider this before the Bill goes to Committee to see if he can do something that would put reality into Clause 3 and give the local authorities the wherewithal to make 100 per cent. advances to people who want to undertake home ownership and who should be encouraged to do so.

8.59 p.m.

Miss Margaret Herbison: We have had a very good debate, during which we have had two maiden speeches, one from the hon. Member for Ealing, South (Mr. Batsford)—I am sorry that I did not hear his speech, although I heard that it was a good one—and the other from my hon. Friend the Member for Shoreditch and Finsbury (Mr. Cliffe). That speech I did hear, and I am sure that hon. Members on both sides of the House realised that here we had a Member with very great knowledge of the subject he was discussing. I am sure that we all look forward very much to his future contributions.
Another speech to which I wish to make reference was that given by my hon. Friend the Member for Coventry, South (Miss Burton). She showed, with a great deal of evidence, how disgraceful was the treatment of women by building societies. I hope that the Minister has taken note of what she said and that in his discussions with the building societies —and especially in view of the great help that he is giving them under the Bill—he will do everything he can to ensure that women get at least equality of treatment with men in the matter of mortgages. My hon. Friend the Member for Wood Green (Mrs. Butler) made one of the most valuable contributions to the debate. She had only a few minutes, and yet during that time she showed very clearly the grave difficulties experienced by local authorities who wish to help in this matter.
The hon. Member for Birmingham, Selly Oak (Mr. Gurden) is living in Cloud Cuckoo Land, according to the speech he made. How right was my hon. Friend the Member for Rochdale (Mr. McCann) in his intervention in relation to the houses

of the cotton-workers—those thrifty and good people who have bought their houses and now have to leave them to find work elsewhere, being left with their houses on their hands. The only reply that the hon. Member for Selly Oak could think of was that possibly they were asking too much money for them.
I turn now to the speech of the Minister of Housing and Local Government. He said that he and his right hon. Friend the Secretary of State for Scotland were proud of the provisions of the Bill. The Minister claimed that it would provide new opportunities for improving housing conditions. Again, haw right was my hon. Friend the Member for Shoreditch and Finsbury when he pointed out that whatever the provisions of the Bill might be they were no substitute for more houses. He realised the very great need that existed in his constituency, and we in Scotland also realise what a crying need there is for more houses, and not merely for transfers of houses from one owner to another.
The Secretary of State for Scotland, in his fairly short intervention, did not seem so proud of the Bill as did his right hon. Friend, and he certainly did not sound so confident. How could he feel either proud of the Bill or confident that it would do much for Scotland? He knows the shocking housing conditions which still obtain in Scotland.
One interesting aspect of the debate has been that only one back bench Scottish Tory Member has spoken. Not only that, but he was the only one who tried to speak. Apart from the Secretary of State's P.P.S., he is the only one who has adorned the benches opposite during the hours that we have been discussing the Bill.

Mr. Ross: And he spoke only for about one and a half minutes.

Miss Herbison: That does not surprise me. Hon. Members opposite are either not interested in housing or know, as we do, that the Bill will do very little for Scotland.
This Measure is a further recognition by the Government of the failure of private enterprise. They propose to give £100 million to building societies, at a rate of interest ½per cent. below that recommended by the Building Societies


Association for ordinary mortgages. Why cannot the Government make the same provisions for local authorities who know the needs of their people? My hon. Friend the Member for Wood Green said that her local authority had been asking for the opportunity to advance 100 per cent. loans. Local authorities will consider that they should have the same generous treatment as is being extended to building societies.
The present rate being recommended by the Building Societies Association is 6 per cent. If the Government start immediately, they will give money to building societies at 5½ per cent. Local authorities have to borrow money at rates from 5⅞ per cent. to 6 per cent. They have to lend money to would-be purchasers at a rate which is a little higher to cover their administrative costs. In October, 1951, under a Labour Government, local authorities were able to offer mortgages at 3¼ per cent. We have always believed that people wishing to buy a house should be given every help. What a difference between that figure of 3¼ per cent. and the present figure of over 6 per cent! At the beginning of this year local authorities could not lend at less than 7 per cent. The present figure is 6⅛ per cent.
In our publication "Homes for the Future" we of the Labour Party say that we will have a special rate of interest for money used by local authorities to build houses for letting and to provide mortgages for those who desire to buy their own house. There is no doubt that this will benefit would-be purchasers much more than will the provisions contained in the Bill.
In this case, as in many other instances, the Government have borrowed their ideas from published policies of the Labour Party. But in this case, as in the case of the pensions legislation, the Government proposals are a poor second. The Rent Act legislation was introduced in December, 1956. At that time there were 2,616 unoccupied houses in Glasgow. The landlords refused to let them because they wished to sell them. Hon. Members on this side of the House continually urged the Secretary of State for Scotland to intervene, but the right hon. Gentleman would not do so. When the Rent Act was introduced he said that it would solve this scandalous problem. What is

the position today? Are these 2,616 houses sold and occupied or are they let, as the Secretary of State insisted that they would be? Of course they are not. Instead of there being fewer houses, the figure for May, 1957, shows that there are 3,539 empty houses. So much for the claims of the Secretary of State in that regard.
My hon. and learned Friend the Member for Kettering (Mr. Mitchison) suggested that building societies were already lending for pre-1919 houses and gave figures for certain building societies. The Government now want to lend on those houses that the building societies up to the present time have considered to be a bad risk. It may he that these are the ones that we were talking about in Glasgow. The Secretary of State said that, of course, we were not just discussing houses which would cost £1,800 or £2,500. Many of them would cost less and these are possibly the houses on which he is hoping that the building societies will now advance money. This ½ per cent., in the Minister's own words, is interest for work and the risk to be taken by the building societies. It is, therefore, again made clear that where private enterprise will not take the risk with its own money, the Government are willing to allow public money to be exposed to a very serious risk.

Mr. H. Brooke: I must clear this up. What I said was that at the present time the building societies had a shortage of money in relation to the demand on them and, therefore, they naturally were willing to lend more freely on the attractive risks, that is, the new houses. The older houses are less attractive, but that does not necessarily mean that they are bad risks.

Miss Herbison: It certainly does mean, so far as the Minister is concerned, that they are a greater risk than the ones on which the building societies are lending at the present time. I am most interested in the Minister's concern for the building societies being short of money. I have here the Building Societies' Year Book for 1958—possibly the Minister knows it— and on page 128, Section 17, lending policy, this is what the building societies say about the shortage of money:
The total of advances made during the nine months of 1957 were substantially higher than during the corresponding period of 1956,


but the rate of lending declined in the fourth quarter owing to a decrease in the supply of available funds.
So far the Minister is correct.
The year was marked by a high demand for mortgages which forced most members to institute schemes for allocating their resources. This high demand was due partly to the effect of the Rent Act and (following the increase in the Bank rate in September, 1957) to the fact that a number of local authorities ceased to make advances for house purchase.
That puts the blame clearly on the shoulders of the Minister and the Government for building societies today being short of money.
The Minister gave figures for the £I,800 house. He said that if a man were earning £13 a week and obtained a mortgage from a building society for £1,800, it would cost him about £12 12s. a month. That would not be his only cost. He would have to add to that the rates each year on his house, and in some places the rates are very high. Again, the Government can take a very great part of the blame for the high rates in our country today. So, when he adds the rates, that puts a further burden on the £13 a week man. In the first instance, he will have to pay out every four weeks at least one week's wages for the house.
Then there are these old houses, the ones that are perhaps a heavier risk than those for which the local building societies are lending at the present time. One never knows when there will be a heavy repair cost. I live in an old house. Year after year something which we just did not expect would happen does happen and the cost is very high indeed. One would have to look very carefully at what the Government are proposing, because it may put heavy burdens on families that they will not be able to face.
I turn to the standard grants. Private landlords and people who own their own houses have already been able, by legislation passed by a Labour Government, to improve their houses, but has a great deal of that improvement taken place? In Scotland, from 1949 until September of this year, the number of houses improved and the improvements completed were only 12,004. The figure that the Secretary of State gave us was for applications for improvements. That figure is 17,300. The English and Welsh figures show that there were 130,315 applications for improvement. The other figure is not given.
Are the provisions for standard grants likely to cause a great improvement in that position? I doubt it. I hope they will, but all the evidence we have so far has shown that in Scotland—the figures for England and Wales are not very much different—private landlords have not made use of those provisions that they could have made. If they put into the houses the four items listed in the Bill, they will get a grant of £150. I have examined those four items and I do not imagine that this will be anything like 50 per cent. of the cost.
Knowing the landlords of Scotland and their record, I shall be very surprised if they are willing to find anything from £150 to £250 for houses that need to be improved. There are in the United Kingdom about 4 million sub-standard houses. If the rate of improvement continues as at the present time, it will take nearly 100 years to bring them up to what we consider a modern standard.
I want to mention a point which has been raised by a number of Members on this side of the House. If a grant under the Bill or under previous Acts is given to a landlord, the house, if it is owner occupied, may be sold within three years, and no part of that grant will have to be paid back by the person who received it. That is wrong. I would not expect the whole grant to be paid back, but this is public money. The house will have been improved, and no doubt when the owner comes to sell it he will get more than he paid for it because of the improvements. In other words, he will be making a profit out of public money. I have no doubt that we shall have Amendments to propose in Committee on this matter.
I am seriously worried about the position of Scotland. We have more than 1½ million houses, more than half a million of which were built more than seventy years ago. If we take the 1955 figures we find that 48 per cent. of the houses in Glasgow were of one or two rooms. What work would have to be done either to put two rooms or four rooms together, or to modernise them in any way? Can the Secretary of State tell me that he expects the private landlords of Scotland, with the provisions in the Bill, to do the job which is so necessary? Of course he cannot.
The Secretary of State said that there have been great improvements since the 1951 census. There have been some improvements, but almost all of them have been due to building by local authorities. In Scotland more than one third of the houses are owned by local authorities at present. If we take the census of 1951 we find that in Dundee more than half of the people live in houses of one or two rooms. The figure for Birmingham is only 2 per cent., in Manchester it is 2 per cent. and in Liverpool—which is considered a very badly housed city—it is 3·4 per cent., as against more than 50 per cent. in Dundee. I say to the Secretary of State for Scotland that he cannot in all honesty claim that this part of the Bill is going to make any worth-while addition to better housing for the people of Scotland.

Mr. Maclay: I made no tremendous claims for the Bill. I believe that it can do a great deal to help, a great deal which was not attempted by the party opposite when it was in power. With all this talk about what is happening in Scotland. I am bound to remind the hon. Lady of what the party opposite was doing in 1950 and 1951 and what its views were of the optimum number which could be built and which we have built. It was very much lower than the number which we said could be built. It is very dangerous for the party opposite to take that line. I agree that we have a long way to go in Scotland to get houses as good as they should be. I am desperately anxious to help. I believe that the Bill will help, but it is not for the party opposite to talk as the hon. Lady has been talking.

Miss Herbison: That is a most interesting confession by the Secretary of State and shows how different he is from the Minister of Housing and Local Government. The Minister made wonderful claims. I was not wrong in suspecting that the Secretary of State was not quite so happy. I am going to deal with the points he has raised. He said that we on this side of the House did nothing about this great number of unfit houses, or houses which needed to be modernised, but it was the Labour Government which led the way by putting on the Statute Book legislation

which would allow landlords in Scotland, if they had the desire, to do the job. The figures I have given show that landlords have not done that job.
The Secretary of State talks of the number of houses which have been built. There were great election promises before I951 of all the houses which were to be built, yet the Government very soon became tired in well-doing. Now we have the picture I have presented. We estimated in 1955 that there were about 250,000 unfit houses in Scotland. The working party appointed by the Secretary of State reported in 1956 that in the four cities where we have more than half our population—Glasgow, Edinburgh, Aberdeen and Dundee—they had more than their share of slum houses. Even so, they had a greater need to house the homeless and the overcrowded. It was a substantially higher rate, the report said, than the number that was needed to replace unfit houses. What a picture of misery, suffering and ill-health that depicts.

Mr. Maclay: What a legacy�ž—

Miss Herbison: The Secretary of State has just taken the words out of my mouth. What a legacy of private landlordism and private enterprise in Scotland.
Faced with that picture, what did the Secretary of State do? On 11th November, 1957, he announced that the rate of building by public authorities in Scotland was to be reduced from the level of 27,000 houses a year to 20,000 in 1959.

Mr. Maclay: Mr. Maclay rose—

Miss Herbison: I am sorry, I cannot give way. Those are figures given by the Secretary of State. If he had had his place in this debate, he would have been winding-up rather than, like a little office boy, intervening in the middle. I cannot give up any further time to him.
We are not opposing the Bill tonight because it may do a little good. I would not put it any higher than that. We know that even the little that can be done until the General Election will be better than nothing. After the General Election. we on this side will begin to operate our plans outlined in the document "Homes for the Future". The policy therein contained is the only policy that will bring hope in Scotland to those thousands and thousands of people who are still living in the most shocking conditions.

9.27 p.m.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. R. Bevins): The whole House will agree that we have had an interesting debate. Until the last five minutes or so, it has been tranquil, also.
First, I should like to add my congratulations to my hon. Friend the Member for Ealing, South (Mr. Batsford) and to the hon. Member for Shoreditch and Finsbury (Mr. Cliffe) for two very attractive maiden speeches. I am sure that we shall have the pleasure of listening to both non. Members again. I am equally sure that the hon. Member for Shoreditch and Finsbury will be more controversial next time than he was today, and, if so, no one will begrudge him that.
I should like next to refer to one or two more detailed questions before coming to the burden of the debate. I took note of what the hon. and learned Member for Kettering (Mr. Mitchison) said in his allusion to the gold watch and what my right hon. Friend had done with it. I should like to leave that particular jewel until a little later in my speech.
The hon. and learned Member said. among other things, that the new arrangements for the payment of improvement grants might well prove an added burden to the ratepayers. Of course, nobody can say to what extent advantage will be taken of the new arrangements. I have, however, made a calculation on the basis of the number of standard grants being trebled during the first twelve months of the operation. In that case, when one allows for the Exchequer grants to the local authorities, the net burden on local government throughout the country as a whole would be about £500,000. It is, of course, conceivable, as the hon. and learned Gentleman will recognise, that that figure might be somewhat diminished by the increased rateable values which those improvements will give.
My hon. Friends the Members for Ealing, South and Holland with Boston (Sir H. Butcher) suggested that the ceiling figure of £2,500 for the pre-1919 houses was too low, particularly in the case of London properties. My right hon. Friend is perfectly willing to look at this again.. and, if necessary, to engage in discussions with the Building Societies Association. The hon. Gentleman the

Member for Shoreditch and Finsbury emphasised his own view that the general need subsidy should be brought back. I gathered that it was his view that we should never make the necessary housing progress until it was. I do not think that he would expect me to give an affirmative answer to that question.
The hon. Lady the Member for Coventry, South (Miss Burton)—and I apologise for missing her speech—had a good deal to say about sex discrimination by the building societies. There are one or two things that I can usefully and, perhaps, helpfully say on this. First, there are, as I think she knows, the better part of 400 building societies which are not members of the Building Societies Association; and, of course, the rules that have been referred to in the Press and elsewhere apply, as far as we know, only to members of that Association.
Secondly, the hon. Lady mentioned, I think, about a dozen cases, spread over a period of about five years. She may well have knowledge of more cases than the dozen or so that she quoted, but one has to keep this in focus, against a background of mortgage advances made during that period by the building societies in about 300,000 cases.
I have refreshed my memory on the provisions in Appendix I to the White Paper, to which the hon. Lady referred and also on the correspondence in The Times. It may well be, as she said at the end of her speech, that notwithstanding the instructions that are issued from the head offices of building societies the administrative action taken in the provinces might be at variance with it. The most I can say now is that although, obviously, we cannot dictate, and are not in a position to dictate to the building societies, my right hon. Friend certainly has it in mind to bring her comments to the Building Societies Association, and to have discussions with them on what, I appreciate, is an important matter—

Miss Burton: I am grateful to the hon. Gentleman for giving way. I intervene for only a moment. Would I be right in assuming that the three larger societies to which I referred—the Abbey National, the Halifax and the Woolwich Equitable —are members of the Association?

Mr. Bevins: Two of them are, but the Halifax Building Society is not.
I turn for a moment or two to the rather technical questions governing trustee status, raised by my hon. Friend the Member for Halifax (Mr. Maurice Macmillan). This is a highly technical matter, and my right hon. Friend would very much like to examine in detail what my hon. Friend had to say. There are, however, two very short comments that I should like to make.
There is, first, the point that building societies with assets of less than £500,000 are excluded. That is because trustee status, in our view, should be conferred only on the borrower of the most demonstrable security. I agree that size, of itself, does not ensure stability, but the larger enterprise is generally regarded as being more stable than the smaller. Proposals have been made at various times for allowing trustees to invest in the shares of companies, but these have almost always included a test of size, and the limit proposed has, in some cases, been a capital of £1 million.
On the other major question raised by my hon. Friends, as to whether the ratios proposed in paragraph 2 of the Appendix were not too low, the ratio of 2½ per cent. of free reserves to total assets is intended to conform generally to the minimum financial standards which are applicable to well-managed building societies. It relates to free reserves and excludes reserves provided for losses on mortgages and other contingencies. As I say, these are highly technical matters which we should like to examine.
Coming to the body of the Bill itself. it is all very well to say that if people wish to own their own homes they should be free to do so. That is not good enough. What we have also got to see is that the facilities exist whereby people are enabled to do so. Although it is true that savings have increased during the last few years, the building societies have to compete for funds with such things as National Savings, stock markets, unit trusts and finance corporations, and, while the flow of money to the building societies has recently increased, as several hon. Members have said, they are still unable to meet the demands for mortgages in full. This has reflected itself mainly in the inability of the societies to give mortgages for the older houses.
At the outset of this operation my right hon. Friend had to decide what would be the most effective medium or media for the encouragement of house purchase. Was it to be the building societies, was it to be the local authorities, or was it to be an entirely new State organisation? We dismissed the last alternative, and although, in the Bill, we are giving local authorities power to lend up to 100 per cent. if they so wish—and I do not suggest for a moment that that power will frequently or generally be used—we concluded that the building societies themselves constitute the most appropriate agency for this task.
Of course, the local authorities, like some commercial institutions, the banks and the insurance companies, are prepared to lend money on mortgage for house purchase, and hon. Members on both sides of the House are grateful to local authorities for what they have done and are doing in this respect. But I think we have to bear in mind that this is only one of the many subsidiary activities of the local authorities.
The building societies' sole function is to lend money for house purchase. Moreover, there are about 1,750 local authorities in Great Britain, and many of them, as hon. Members have discovered from time to time, do not engage in this particular form of activity. Not only are building societies responsible for the advance of the great bulk of the money which is loaned for house purchase— at present, they are lending about six times as much as the local councils—but, as one would expect, their organisation is better adapted for the purpose. It was chiefly for those reasons that my right hon. Friend and the Government decided to devise a simple scheme which would cover the whole country and which would be operated by the building societies.
A great deal has been said in the debate about some of the financial implications of these proposals and it is only right that I should say something about that. As my right hon. Friend said earlier, it is part of the Government's scheme that there should be a margin of one-half of 1 per cent. between what the building societies pay for their money and the price which they will be able to charge for that money. In 1957, the building societies' average costs worked out at about 12s. per £ 100. Some societies, it


is true, have to meet overhead charges which are rather more than that figure. Others have costs which are below 12s. per cent. Indeed, I am told that there are some societies, although perhaps not many, whose overhead charges or total costs are rather less than 10s. per cent.
The average costs for all societies is about 12s. per £100. This means that under our scheme the societies will have less money, not more money. for expenses than their average cost of transacting their ordinary business. The building societies have accepted this proposal, and we think it right that they should do so. After all, under this new arrangement, the societies will not incur such expenses as the cost of advertising for funds, as they normally do. I suppose it is a safe bet, too, that the more business building societies do the more likely it is that their overhead costs will fall.
I turn to the rather vexed question: why are the Government proposing to lend to building societies at 5½ per cent. and persisting in charging local authorities 5⅞ per cent. for the same twenty year period of lending? It is not possible to draw an exact comparison between advances which are made to and from building societies and those to and from local authorities, because the building societies' interest rates vary from time to time. That is inherent in the scheme. In the case of local authorities, the rates will remain fixed throughout the whole period of the loan.
I ask the Opposition to recognise that, accepting the decision to use building societies for this purpose, there must be a margin of ½per cent, and that even on this basis they will do less well than on the business which is financed by private as opposed to public money. More important still, the Opposition have argued this question today on much too narrow a front. The hon. Member for Hayes and Harlington (Mr. Skeffington) and the hon. and learned Member for Kettering I think, both narrowed it within the context of why we should charge building societies 5½ per cent. and local authorities 5⅞ per cent.
It is well known that, even if building societies borrow more cheaply from the Exchequer than local authorities, that in itself is only a bit of the picture. The financial relationship between the Government and local authorities is not

merely a matter of money rate. It is not merely a matter of whether they can borrow at 5½ per cent. or 5⅞ per cent. Such things as subsidies and grants are also embraced, which considerably ease the position of local authorities throughout the country.
For example, a local authority may build a school. Whatever it pays in loan charges—and this is very relevant to the argument the State defrays more than half, either through specific grants, as at present. or through the general grant in future. After listening to the debate, my own feeling is that hon. Members opposite are attaching far too much importance to the question of interest as it affects local government.

Mr. Steele: What have schools got to do with it?

Mr. Bevins: Perhaps I can illustrate the argument by giving one or two figures. In the last full financial year, the total expenditure of local authorities throughout Great Britain was £1,352 million. Interest payments were £140 million. Interest was, on the average, a shade over 4 per cent. Suppose that during the whole period of borrowing local authorities enjoyed a rate of interest ⅜ per cent. lower than they do, in fact, enjoy.
Supposing, for the sake of illustration, that that had been going on all the time, there would then have been a saving in interest by local authorities of flit million a year, half of which, of course, is defrayed by the Exchequer by means of grant, leaving a residue of £7 million. This is exactly one two-hundredth of the total local authority expenditure and is the equivalent of less than Id. rate. Really, this is the merest bagatelle.

Mr. Mitchison: Without wishing to disturb this touching picture of the intimate and warm relationship between local authorities and the Public Works Loan Board, I should like to ask the hon. Gentleman to explain what this has to do with the point we have been discussing.

Mr. Bevins: It has this to do with the point we are discussing. What my right hon. Friend says is that, given the decision to use the building societies, there must he a margin of ½ per cent. between the rate at which the building societies lend and the rate at which the Government advance funds to the building societies. As I understand him, the


hon. and learned Gentleman has argued that, if the building societies are entitled to money at 5½ per cent.—nobody knows, of course, what the rate will actually be —then the local authorities also ought to be entitled to borrow money on the same terms. All I am saying is that the relationship between the Government and the building societies, in the one case, which is a special case, and between the Government and the local authorities, on the other hand, is entirely different.

Mr. Steele: Why?

Mr. G. W. Reynolds: The hon. Gentleman said that the local authorities would not give a variable rate. His own Minister, of course, gave them permission for a variable rate for this specific purpose less than fifteen months ago. However, it is not only a question of 5½ for the building societies and 5 for the local authorities. It is really a matter of 5½ per cent. for the building societies and nothing for the local authorities from the Public Works Loan Board. It is £100 million for the building societies, whereas most local authorities are refused any money at all from the Public Works Loan Board for this purpose.

Mr. Bevins: That is wholly untrue. Local authorities, as the hon. Gentleman knows perfectly well, are encouraged to raise their money in the market. [Laughter.] If hon. Members are not aware of the experience of local authorities which have. in fact, raised millions on the London market during the last six months or so, they really must learn their facts. If a local authority is unable to borrow in the market, it can go to the Public Works Loan Board. There is no question whatever about that.
I come now to the hon. and learned Gentleman's "gold watch". He said that my right hon. Friend had "pinched" his gold watch and proceeded, I think, to put sand in the works. What he meant by that figure of speech was that the party on this side had stolen the programme of the party opposite, as set out in various not very intelligent pamphlets which have been produced from Transport House. To our utter astonishment, he went on to say that these statements of policy showed the desire of the Labour Party to promote home ownership, on

which, he added, it had always been so keen.
Over the weekend, I enjoyed a little light reading connected, in a peripheral way, with this subject. One of the pamphlets I read was written by the hon. Member for Widnes (Mr. MacColl). I am sorry that the hon. Gentleman is not here. On the subject of the owner occupier, under the heading "Property owning Democracy?", he said:
There is no fundamental objection to a man owning his own houses any more than to owning his own trousers.
I am tempted to observe that the enthusiasm of some hon. Gentlemen opposite for home ownership is very deep-seated indeed. However, let me turn from the promise to the performance, from the speculation to the reality. During the last year in which the party opposite enjoyed power, 20,000 houses were built for sale.

Mr. C. W. Gibson: Here we go again.

Mr. Bevins: Yes, here we go again, and we shall go on a lot longer, too. Those houses were all built sparingly and all under licence—the old "one-in-four" formula.
During the last nine months, more than 100,000 private houses for sale have been started, and 120,000 have been finished in the last year. What is the reason for this remarkable contrast? Whatever the Opposition may say now, in their aim to achieve respectability and in their attempt to escape from the clutches of the "Victory for Socialism" group, the fact of the matter is that the Labour Party has always been secretly, not publicly, contemptuous of the conception of a property-owning democracy. [HON. MEMBERS: "Nonsense."] Of course, they have. Indeed, from their own point of view, they are probably right, because it is not part of the Socialist mission in this land to manufacture Conservatives.
The right hon. Member for Ebbw Vale (Mr. Bevan), speaking in the House in 1951, made this striking declaration:
Inside the Labour Party, there has always been argument as to whether we ought to have allowed any private building for sale at all.—[OFFICIAL REPORT, 4th December, 1951: Vol. 494, c. 2256]
In 1958, we are told that this argument has been resolved, but has it been


resolved? This House debated housing in the local government sphere on 1st May, 1958, and, towards the end of that debate, the hon. and learned Member for Kettering himself rose to interrupt, and this is what he said:
Would not the hon. Gentleman agree that building licences would be a much more effective and better method of combating inflation than cutting down the building of necessary houses by councils? "—[OFFICIAL REPORT, 1st May, 1958; Vol. 587, c. 602.]
Those are the actual words of the hon. and learned Gentleman. [HON. MEMBERS: "What is wrong with that?" 3 What is wrong with it? Hon. Members on this side of the House, and right hon. and hon. Gentlemen opposite, are perfectly well aware that, given the smallest suggestion of inflationary pressure at a time of a Labour Government in this country, the first thing that such a Government would do would be to reintroduce building licences, not only for general building, but over the whole area of private house-building for sale.

Mr. Mitchison: Not merely for houses, and the hon. Gentleman knows it, but building licences were required for many other purposes—to prevent too many petrol stations and the rest.

Mr. Bevins: The House will have noted the hon. and learned Gentleman's expression when he said "not merely for houses, but also for petrol stations and the rest", with the implication that there would be building licences for private houses as well. No doubt, the promises in the Opposition's glossy pamphlet are very attractive and appealing to gullible people. The idea of 100 per cent. mortgages at 3 or 3½ per cent. Ís, naturally, very attractive, but the fact of the matter is this. What is the use of a full mortgage on easy terms if the prospective house purchaser is not able to buy, which was the position between 1945 and 1951?
For our part, we on these benches believe passionately in the conception of home ownership, and, because we do, we mean to extend and encourage it. I commend the Bill to the House.

9.54 p.m.

Mr. G. W. Reynolds: It has been very interesting listening to the Parliamentary Secretary trying to justify the Bill. I am surprised that he sat down so quickly after referring to only

one or two different aspects of Labour Party policy.
I have got the statement here which deals with the Labour Party's housing policy, and I also have a question and answer pamphlet which makes it clear. As the hon. Gentleman referred to one or two points, I also should like to refer to them. I should like to draw the attention of the Minister and that of hon. Members opposite to pages 24 and 25 of "Homes of the Future" in which a definite pledge is given, showing that we believe 100 per cent. mortgages should be given by the housing authority to those people in housing need, and I should like to say that the idea of 100 per cent. mortgages has been lifted straight out of this pamphlet and put into the Government's Bill. That is the first thing.
Then we go on to the second part of the Bill. The Government have now decided that local authorities which improve housing accommodation should get the same type of grant from the Exchequer as would be given to private landlords. The 1949 Act provided that there was a rather curious idea of a percentage worked out in the Ministry with which nobody in the local authority would agree.
I would ask the Minister to look at pages 44 and 45 of this document, where he will see it quite definitely laid down, approved by the annual conference of the Labour Party, that we believe that local authorities should be given sums from the Exchequer to improve accommodation on exactly the same basis as the private owner. It goes on to say that the local authorities shall be obliged to make certain grants to persons who wish to improve their housing accommodation.
I refer the hon. Gentleman to Question 26 in the Question and Answer pamphlet. where, once again, it is quite definitely laid down that we in the Labour Party. when in the next Labour Government, would make it obligatory on local authorities to give grants for improvements under the 1949 and 1954 Acts as well as those which the Minister is at present introducing.
The hon. Gentleman also said that part of the reason for asking building societies to help out in this work, to give 95 per cent. mortgages, was that they covered the entire country. I think that he will


find that even where district councils are not operating the provisions of the Small Dwellings Acquisition Acts and the Housing Act, 1949, the county council is doing so, and I doubt very much indeed if there are any substantial parts of England and Wales at present where, either from the district council or from the county council, it is impossible for someone to obtain a mortgage from a local authority.

Mr. Farey-Jones: Would the hon. Member give a list of county councils that are doing that at present?

Mr. Reynolds: London County Council, Middlesex County Council, and, I think, Essex and Kent County Councils. One can go right through the whole lot. London County Council, I can assure the hon. Member, is doing it. Middlesex County Council, since it became Labour controlled in April this year, has started doing it. The Tories, when they controlled it, took the first opportunity to do away with that provision and of packing up the scheme, but when Labour gained control in April it restarted the scheme again.
I am convinced that there is really only one way in which we can get most of the property in this country improved and brought up to a proper standard. In my own constituency literally hundreds of people are being forced to live in one or two rooms in parts of Victorian houses which were built simply for one family each, but are now occupied by three or four families. There will be hardly any landlords at all in the Borough of Islington who will come along and ask even for this new improvement grant. I do not think that any of them will be prepared to spend even £150 to improve their properties, because there is no profit or hardly any profit in it for them.
I should think that by now even the party opposite, which tried to solve this problem by the Housing (Repairs and Rents) Act, 1954, and failed miserably, must realise that. It had to repudiate that Act and bring in the Rent Act, 1957, because in 1954 it completely failed. I should have thought by now that that party would have realised that it cannot drive landlords to carry out repairs and improvements because they still have to find a bit of their own money. The days

of the saying, "Safe as houses" are long past. People are not interested in investing in housing when they can invest in far more profitable shares of one kind or another and get a far better return.
There is only one way to deal with this problem. It is the way proposed by the Labour Party, that the local authorities get in and get on with the job. They have a wonderful record in housing administration, and I think that they are the only bodies which will give us homes fit for the majority of the people to live in.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. E. Wakefield.]

Committee Tomorrow.

Orders of the Day — HOUSE PURCHASE AND HOUSING [MONEY]

Considered in Committee under Standing Order No. 84 (Money Committees).—[Queen's Recommendation signified.]

[Sir CHARLES MACANDREW in the Chair]

Resolved,
That, for the purposes of any Act of this Session to authorise Exchequer advances to building societies and make further provision for grants by and Exchequer contributions to local authorities towards the improvement of dwellings, it is expedient to authorize—
A. the issue out of the Consolidated Fund of such sums as may be required for the purpose of making to building societies advances not exceeding one hundred million pounds, the borrowing in any manner authorised under the National Loans Act, 1939, and payment into the Exchequer of any money needed for providing or repaying such sums, and the repayment into the Exchequer, with interest, of any such sums and their re-issue out of the Consolidated Fund;
B. the payment out of moneys provided by Parliament to local authorities making grants towards the cost of providing dwellings with certain amenities of such contributions as may become payable as a result of applying to such grants the provisions of the Housing (Financial Provisions) Act, 1958, or the Housing (Scotland) Acts, 1950 to 1957, relating to Exchequer contributions in respect of improvement grants;
C. the payment out of moneys provided by Parliament to a local authority executing works required for providing a dwelling with certain amenities of an annual contribution for twenty years of an amount equal to three- eighths of the loan charges referable to the cost of the works;


D. the payment out of moneys provided by Parliament of such increases in the moneys so payable under the enactments mentioned in paragraph B of this Resolution as are attributable—

(1) to any relaxation of the requirements as to which a local authority must be satisfield before approving an application for an improvement grant;
(2) to any addition to the authorities which are local authorities for the purposes of section nine of the said Act of 1958;
(3) to the substitution for the annual sums payable by way of contributions under sections nine and twelve of the said Act of 1958 of annual sums equal to three-eighths of the loan charges referable to the cost likely to be incurred by local authorities in carrying out approved improvement proposals or by housing associations and development corporations in carrying out arrangements with local authorities for the provision of dwellings by conversion of houses or other buildings or for the alteration, enlargement, repair or improvement of dwellings;

E. the payment out of moneys provided by Parliament of any increase attributable to the said Act of this Session in the sums payable by way of Rate-deficiency Grant or Exchequer Penalization Grant under the enactments relating to local government in England and Wales or in Scotland;
F. the payment out of moneys provided by Parliament of any administrative expenses incurred by the Minister of Housing and Local Government or the Secretary of State under the said Act of this Session;
G. the payment into the Exchequer of any sum received by the said Minister or the Secretary of State from a local authority by virtue of the said Act of this Session.—[Mr. H. Brooke.]

Resolution to be reported.

Report to be received Tomorrow.

Orders of the Day — SLAUGHTER OF PIGS (ANAESTHESIA)

10.0 p.m.

Dr. Barnett Stross: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Slaughter of Pigs (Anaesthesia) Regulations, 1958 (S.I., 1958, No. 1971), dated 24th November, 1958, a copy of which was laid before this House on 28th November, be annulled.
There are very few, if any, Statutory Instruments that I have awaited with greater interest than this. My hon. Friends and I are very happy to have this opportunity of discussing it. The Joint Parliamentary Secretary will remember that my hon. Friend the Member for Sunderland, North (Mr. Willey) raised the matter in Committee, on 5th March,

1958, and that I had a few words to say at that time. Tonight, we wish to take this opportunity to ask some questions of the Parliamentary Secretary, and to request certain assurances.
Before anything else, we welcome the opportunity to say how grateful we are, as I am sure are the Parliamentary Secretary and all his hon. Friends, to all those who have been responsible for inventing the machine that we are to discuss, and those who have effected improvements upon the type of machine that we discussed in March. We ask the Minister to make it clear to individuals and organisations—in particular, to the Royal Society for the Prevention of Cruelty to Animals and the Universities Federation for Animal Welfare—that we are deeply grateful to them. We hope that the hon. Member will let those organisations know without delay that we have been deeply interested in their work, and feel that we have cause to be grateful to them.
Although I have been on my feet for only a few minutes, the Parliamentary Secretary may have realised by now that I do not possess an electric goad and have no intention of driving him into the Lobbies, either on a conveyor belt or on his own feet. We do not propose to divide the House; we are using this opportunity to ask questions and to try to obtain further reassurances.
When we discussed this subject in March we had before us the description of a machine to which was attached a moving belt upon which pigs were to be delivered to the machine itself, which stood in a chamber. We understood that in this chamber there would be a release of carbon dioxide gas, and we were advised that animals would be rendered unconscious by it within twenty or thirty seconds. We knew that it cost only about 1d. per animal to bring about anaesthesia. We had a discussion about the use of the electric goad to drive the animal on to the conveyor belt, and was asked for a proper training of attendants. Some hon. Members made remarks not entirely complimentary to certain hon. Members who are termed Whips, and who drive us from place to place. We asked for people who were not likely to become excited, who were well experienced, and had had proper training.
We note that under the Regulations specific modifications have been made


to the details of the machine we were discussing, which had been used in the United States in the first place and also, in an improved form, in Denmark and Holland. I have noted four modifications in the Regulations. The first is that every pig is now to be confined in a separate compartment of the machine. This was not made apparent to us before. If this be a new modification, and a new British modification, we are glad to hear about it. Secondly, a visible and audible warning to the operator will take place if the concentration of carbon dioxide gas rises above 70 per cent. or falls below 62 per cent. I should like some information about this. Why is it that the ideal concentration has been found to be within a limit of 62 per cent. to 70 per cent.? Human beings exposed to carbon dioxide gas lose consciousness in about a minute if there is a 10 per cent. concentration. The Parliamentary Secretary will remember that a concentration of about 65 per cent. which we discussed last March must be pretty cold, but perhaps the hon. Gentleman has information which is not available to me and will tell us about it.
The third modification which we like very much is that means of access to each animal is to be available in every part of the machinery. I had hoped that something like this would be done, that it would be possible to stop the machine or rescue the animal from any part of it if something was going wrong. The fourth modification I note—if it is a modification—is that there will be means of rapid extraction of the gas from the chamber if and when that is required.
I wish to put these questions. First, may we have a specific reassurance about what will happen to animals in the machine? When I spoke about this in March, I asked whether an inspection chamber could be fitted so that we could watch. We had been advised that in an experiment conducted in connection with this technique in anaesthesia, observers noting 60 pigs passing through an electrically operated type of machine—not the one we are now discussing—had remarked that one in 15 or 20 animals had screamed. and that two out of the 60 came out of the machine bleeding at the mouth. It was thought that they had bitten at the containing bars and hurt themselves. I wondered whether something had happened to make them panic.
At that time we discussed the grading of the animals and decided that a difference in height of even two inches— if the pig were two inches higher than the average height of animals being put through the machine might prevent the animals from being anæsthetised. Carbon dioxide gas is an inert gas and the action is that of asphyxiation by the prevention of the inhalation of normal oxygen. The gas lies at the bottom of the machine, and to obtain ideal results pigs must be of an even graded height. That brings me to one reason why we cannot use the machine for birds or for cattle at the present stage, because we could not guarantee to grade cattle and birds, and so we know that the operation would not be successful. I ask, therefore, what grading for height is thought necessary and whether the conditions are as before?
Another question is, what percentage of failures occur? The Regulations make clear that steps are to be taken to ensure that if there is a failure, something can be done at once. The Regulations say that there should be someone standing by with an electrical stunning machine at his disposal, in good order and ready for use at once. I presume that this is in case something goes wrong. Will the Parliamentary Secretary advise us whether there is any possible likelihood of failure with the type of machine that we now have in mind, and if so what percentage of failures he thinks there may be? I am assuming that the machine runs perfectly and is licensed by the local authority as being in good order.
I should also like to know whether research is being continued to bring about further improvements. In discussing this, all of us hoped—and I think that I spoke of this myself—that if we continued with our research and experiments there was no reason why we should not ultimately achieve a machine which was quite foolproof, something perfect, and something with which we could all be completely content.
Can the Parliamentary Secretary tell us whether any films have been taken? I think that a film could be taken inside this machine, using infra red photography, to show what really happens. If this has not been done, will the hon. Gentleman take the matter up to see whether it can be done because continuous inspection of that kind would teach us a great deal.
We believe that this is a very real step forward in the slaughter of animals. Many thoughtful people are not very happy at our having to use the flesh of living animals for food. We do not talk much about it, but we are not always happy about the thought. It may be that in 10,000, 50,000 or a million years' time the practice will cease altogether; but today, and until such happy event, it is essential that we shall take every possible step that we can before slaughter, as I am advised, and I think that it is true, that most of the pain and suffering can happen to the animal at the point of slaughter and we should do everything in our power to minimise all possible pain and suffering.
Of all our discussions on the Bill—and we had a number—this was, I think, one of the most pleasant that we had. The Parliamentary Secretary knows that we always enjoy coming back to this subject, with him sitting in his seat. It is rather like a reunion of old boys. He knows that, if ever we made him perspire a little as a result of our efforts, we meant it in good heart as we wished to improve the Bill.
On this matter the Minister himself mentioned on Second Reading—I am speaking of the present Chancellor of the Exchequer—this type of anaesthesia. We are very happy to know that we now have what may well be the best type of machine available in the world. Therefore, I say that we should continue with our research, never ceasing to take every possible step that we can because ultimately we can achieve almost the ideal.

10.14 p.m.

Mr. F. H. Hayman: I beg to second the Motion.
I would say, at the outset, that it always seems rather odd that when one wants to say something in praise of Regulations of this kind one has to speak on a Motion to annul them. There is no need for me to say very much, except to say that we on this side of the House are very grateful to the Parliamentary Secretary for bringing forward these Regulations so soon after the Slaughter of Animals (Amendment) Bill was passed.
I must admit that it was a very great shock to me to learn that there were considerable doubts about the efficacy of the

electric stunning of pigs, particularly because there are two bacon factories in my constituency. When I learned of this method through the Universities Federation for Animal Welfare I was rather staggered at the newness of the approach.. During a Committee debate on the subject we found there were doubts even about that procedure. My hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross) assures me that the new Regulations will provide the finest machine of its kind in the world, and we hope that it is so.
On a non-controversial subject of this sort we congratulate the Parliamentary Secretary on submitting these Regulations.

10.16 p.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. J. B. Godber): I am grateful to the hon. Member for Stoke-on-Trent, Central (Dr. Stross) for saying, at the outset of his speech, that in praying to annul these Regulations that was the very last thing that he had in mind and that he wished them to be continued.
I am grateful to the hon. Member and also to the hon. Member for Falmouth and Camborne (Mr. Hayman) for the points which they have raised on the Regulations and what I take to be their clear welcome for them. The Regulations will provide a definite improvement, as the hon. Members have rightly said, in our methods of dealing with the slaughtering of animals and I believe that they are a very big step forward.
The hon. Member for Stoke-on-Trent. Central was kind enough, in his reminiscences, to refer to the happy time that we had together in Committee on the Slaughterhouses Bill. Those who had the privilege of serving on that Committee look back upon it with interest. Had we had the benefit of this anæsthetic at that time it might have made the occasion even more pleasant for some of us. I shall be happy, if any hon. Members wish, to take them through the new installation, so that they can test it anæsthetically for themselves.
More seriously, perhaps, I might deal with the points which the hon. Member for Stoke-on-Trent, Central raised—important points. He welcomed one or two new matters brought forward in the Regulations, such as the provision for


separate compartments. I was glad to have his welcome of it, and also of the provision for visible and audible warning. This will prove very helpful. It takes the place of the need for an inspection chamber, to which the hon. Member referred. It is quite an effective counterpart for it.
We went into this question of the inspection chamber with great care. We took the advice here of the R.S.P.C.A., who felt fairly strongly that it would be unwise to put in an inspection chamber, because the chamber would need lights which would tend to irritate and alarm the pigs. It was thought better not to have them. We therefore have the visible and audible warning, which will provide the same benefits without that danger.

Dr. Stross: I am sure that the advice given to the Joint Parliamentary Secretary is correct. I had in mind not an inspection chamber for the machine in the abattoir, but for purposes of research.

Mr. Godber: Yes, that was the point which the hon. Member raised. It is one which I would wish to look into, to see whether we can interest any of the welfare bodies in carrying out something of that sort. We will welcome any further information we can get on that matter.
The hon. Member asked me about the percentage of 62 per cent. to 70 per cent. which we have laid down. We have done this on the best advice we could get from countries which are already using this type of anæsthetising chamber. We find that they have reached the conclusion that something between those two figures gives the best results. There is a rather interesting article, incidentally, in the Sanitarian for this month, in which it is stated:
If the concentration of carbon dioxide in the chamber is too high, it may irritate the mucous membranes of the nose and throat, and pigs tend to scream and struggle.
If it was over 70 per cent. that would be the sort of occasion when that would happen; but it is the experience of those other countries that those particular percentages are the most suitable.
The hon. Member asked about the grading of beasts for size. This is something at which we looked carefully after the comments made in Committee. In

these Regulations we are providing for a uniform type of chamber and it is the normal custom, we find, for the type of pigs which go through to be of the normal bacon size. There is a rough standardisation and animals over a certain size would not be able to go through. For instance, large sows and boars would not be able to go through. We think that from our present knowledge this is an adequate safeguard, but, again, it is something we shall watch. This method of slaughter will be done in a relatively small number of cases and we are asking local authorities to let us know where these installations are set up. We shall make it our duty to be satisfied that in this respect. as in others, all is well.
The hon. Member asked about the percentage of failures and did so on the basis of the fact that under Regulation 5 (b) we are requiring a mechanically operated instrument. That provision is purely as a safeguard and not because we believe there will be failure. From the inquiries I have made there are no reported cases of failure from any of the countries which are using it. I should have thought the likelihood of failure is very small. Nevertheless, we felt it right and proper to make this provision that there should be a mechanically operated instrument ready in case anything wrong should happen. It is a sort of double check. I think that it would be welcomed by hon. Members on both sides of the House to know that we have made that provision.
Those were the main points to which the hon. Member referred. I emphasise again that we are anxious to learn more about this method and that we shall keep the closest watch and check on it. If we find any need, we shall not hesitate to come back to the House and ask for amendment of the Regulations. We are entering a new field, something of which we have no previous experience in this country. We have taken advantage of all the knowledge we can obtain from other countries, but, as I say, we shall keep the closest watch on it so that we may satisfy ourselves that under the conditions obtaining here we have made adequate and proper provision for this method.
As to the possible use on other animals at a later stage, we must see how we get on. That is a time-honoured phrase in this House and it is not unfitting here. If we find that there are possibilities of


being able to make further progress in this way, we shall certainly not hesitate to come forward with fresh regulations.
I am grateful to the hon. Member for Falmouth and Camborne for reminding us that we have brought the Regulations forward as soon as we conveniently could after the passing of the Act, because we are anxious, as I am sure all hon. Members are, to try to reduce any element of unnecessary suffering in slaughterhouses. We think that these Regulations are a useful contribution to that end, and I am most grateful to hon. Members for the way in which they have received them.

10.25 p.m.

Mr. Frederick Willey: I am sure that the whole House is greatly obliged to the Joint Parliamentary Secretary both for the replies and for the assurances he has given. For once, we are praying not to criticise, but to acknowledge what the Parliamentary Secretary has done. He will remember that in Committee when we discussed this provision we were anxious that there should be full consultation with the manufacturers, the trade unions and the animal welfare societies. It is clear from what the hon. Gentleman has said that there has been consultation and that it has been beneficial. It is a good thing to bring in these bodies to participate in legislation when it takes this form.
We had one or two doubts when discussing the matter in Committee, particularly concerning the inspection provisions. I have had an opportunity of speaking both to the Universities Federation for Animal Welfare and the R.S.P.C.A. They are both satisfied that the provisions which the Regulations make are right and that any form of inspection window might make the pigs less docile and make the arrangements less effective.
The Parliamentary Secretary will remember that we were also concerned about the use of the machine. The Regu-

lations contain provision for instructions and I hope that the hon. Gentleman will keep in touch with the trade union about these instructions and consult the union in due course about them. It is important not only that we provide this new form of slaughter, but that we should ensure that it is used as humanely and efficiently as possible. I also remember the point about uniformity. From what he has said, the hon. Gentleman has probably taken the most effective step in ensuring uniformity. Again, however, I hope that this will he kept under review and, if necessary, supplemented in the instructions.
I am pleased also to see the provision for the certificate of approval. This, too, was a point we discussed in Committee. We were anxious that the manufacturers should be brought into this. It is clear that such a provision will make the manufacturers anxious to ensure that they obtain the necessary certificate of approval and that the appliances will tend to be standardised, therefore giving a greater degree of certainty that they will be humane.
One final point that the hon. Gentleman touched upon was the use of similar appliances for the slaughter of cattle. He appreciates, I believe, that the animal welfare societies have some considerable doubts about this. From what he has said, however, there is no question of an extension of this provision to other animals until tests have been conducted and have satisfied those who endeavour to provide the most humane conditions in our slaughterhouses.
We are greatly obliged to the Parliamentary Secretary. We are not all vegetarians in this House, but we want to ensure that the most humane conditions apply in the slaughterhouses. The Regulations will help to ensure this.

Dr. Stross: I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

Orders of the Day — BASUTOLAND

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Oakshott.]

10.28 p.m.

Mr. James Johnson: I wish to detain the House tonight to speak about a little far-off land which has enormous significance, far outweighing its size, to the world outside. If we sometimes say that Hong Kong is the democratic shop window for China, we might equally say that Basutoland is the democratic shop window for the Union of South Africa.
This land is of vital importance from the ideological point of view. What Her Majesty's Government do there with these people will echo and re-echo among millions of Bantu people. For some weeks we have had a distinguished delegation led by the Paramount Chief, Mantsebo Seeisio, and some of her leading chiefs. Not least in the delegation is a South African who has been advising them, Professor Cowen, of the University of Capetown—a fine type of Liberal. We are glad to see them here, and we welcome them in our midst.
The Bantu are a loyal and an attractive people, who live in a very harsh land. This tough land has made of them a tenacious people. Their country is completely land locked by the Union, and, indeed, if the Union cared to impose economic sanctions it would be very difficult for them. The lowlands begin at some 5,000 feet, and the gaunt highlands go to about 11,000 feet, while the sandy soil has been sapped for over 80 years by excessive cropping. There is no organic manure, for the animal dung is used for fuel.
Here, therefore, we have one of the worst examples of erosion, on a spectacular scale, and I hope that the Minister may be able to tell the House what is being done about this erosion. Is he satisfied with the number and the calibre of his agricultural officers? Is the Administration advancing sufficiently large numbers of young Bantu into these jobs? Are we thinking of mechanising the farming, in place of old and insufficient numbers of oxen? Is timber being planted on the high mountain slopes

behind? All these things are of vital concern to these farming peoples.
Again, there are no large towns. Maseru has a population of less than 5,000, and, alone of the capitals of South Africa, does not have a Barclays Bank. There are no roads, no industry, but, lucky for these Africans—and they are luckier than some—no white settlers are allowed to own land. They are a genuine nation, welded together by their famous Chief Moshesh. They became wards of the Queen in I884, and I would like to quote the words of the then Chief Moshesh, as they apply now just as much as when they were spoken. He said:
Let me and my people rest and live under the large folds of the flag of England, before I am no more.
For over fifty years they have had an Advisory Council, and then before the last war, they asked for a legislative council, and repeatedly since but have not been satisfied. As late as 1943 they were given indirect election, which has worked well, and, at the moment, there are 42 elected members out of 100 on the Advisory Council. Only four years ago, there was a Government Commission, under Sir Henry Moore; but, fantastic to say, this Commission did not say a single word about a legislative council, despite the fact that no less an authority than Lord Hailey had been saying for many years that such a council was the obvious and only step forward in the history of these Basuto people.
There has been this increasing misunderstanding between Her Majesty's Government and the local administration. They are a loyal people, and have an honourable record in two world wars, and they wish to go on their way and develop uninhibited. I think the Minister will agree with me when I say that they would become bitter if South African apartheid should thwart their advance.
In September, 1955, the Basutoland Council, a body of 100 members which, as I say, had been in action for over 50 years, passed Motion 90, requesting that it be given power to make laws in all internal matters. In May, I956, the Secretary of State said that he was willing to consider proposals along these lines, and we have now had a delegation here


for some weeks, conferring with the Secretary and the Under-Secretary of State.
Their proposals can be summarised as follows: the establishment of a legislative council; the association of Bantu in the 'work of an effectively-powered executive council, and the establishment of local government. In the legislative field, it is proposed that the elected elements of the council be increased from 36 per cent. to 50 per cent., giving both chiefs and commoners a fair say.
Those are the proposals that they have put forward, but it is the franchise that is so very important, because they say that those who are members of the Bantu nation should vote. In addition, of course, they have the usual other qualifications about being aged 21, having lived six months in the Colony, paid their taxes, and so on.
I think that the only advance to be made in our African Colonies or Protectorates is along the line of a common roll, where Europeans and Africans, and, indeed, Asians, will vote on a common electoral register. I understand that the Secretary of State for the Colonies thinks so too, but does the Minister think so? Of course, I think in terms of white Basutos and black Basutos. There is nothing whatever to stop the 2,000 Europeans who are in the Colony voting upon the same list as the 650,000 native peoples, or, at any rate, those out of that number who qualify.
Basutoland is the ideal place for a common roll to be enacted in this way. There would be no apartheid there, although I am told by those who have been to the Colony that they have been shocked by the application of the colour bar which operates at the present time. There is a hotel called Lancers, to which entry is refused to even distinguished people in the Colony, people such as some of those who appear in the delegation. Even leading chiefs are not allowed to enter the hotel. I understand that the Paramount Chief herself and a few civilians are given permits to enter the hotel. This state of affairs is quite appalling in a colony where Europeans are not even allowed to own land and who are there under terms laid down by the great Mushesh Chief seventy or eighty years ago.
Turning to economic development; any young man of the Colony has to leave the country in order to get a job. Some 150,000 go to the Union in the mines and farms. What are the Administration and Her Majestys' Government doing about developing the Colony's internal economy? What about the development of water power on the Orange River? What is happening in the matter of diamond mining with a gentleman named Colonel Jack Scott? What about the possibility of starting a tobacco or blanket factory there? There are over I million sheep in the Colony and blankets are the natives chief item of attire.
There has never been a high-powered economic survey of the Colony. The Minister might consider sending somebody like Mr. Arthur Gaitskell, or someone of his calibre, to investigate the possibilities of the Colony, for activities by C.D.C.
I come next to the question of education. There is an enormous thirst among the Basuto people for education. It is amazing to find how many girls in the Colony attend school. There are about 116,000 pupils in the schools of whom 72,000 are girls. This is an amazing difference to the pattern for Africa as a whole, where usually the boys are at school. They are nearly all literates, even the high shepherds and the cattlemen in the mountains.
Unfortunately, what about the lack of facilities for higher education? I think that there are only 11 Basuto students in the United Kingdom and nine in the Union. The Union is now clamping down on Basutos coming to its territory. Would the Minister consider sending these young people to the new university in Salisbury? That seems logical. The Canadian Catholics in the Pope Pius XII College at Roma are doing fine work in this field—where their students number 100 Africans and seven Europeans. They are completely non-racial.
It would be much more logical and sensible, since we are not to send these Basutos to the Union as in the past, to tie up the schools matriculation examination with that of the Federation of Central Africa and, also, London, and have the college in Basutoland linked with the University of London and with the Inter University Council.
The Basutos are vehement in their opposition to Bantu education. Therefore, I ask the Minister to think about matters on these lines. The sensible thing to do is what the Basutos want.
What about the future constitutional position of these people? Are the Basutos to be denied advance because of their country's geographical position? There they are land-locked by the Union and the only way out is through Bloemfontein. It is thought that Dr. Verwoerd wishes to absorb Basutoland. Certainly the Basuto nation wishes to avoid this at all costs—they have an abhorrence of apartheid just like ourselves. It is interesting to see this view expressed by a member of the executive of the official South African Bureau of Racial Affairs, in its news letter of July and August:
The Basutoland proposals, which at the moment are enjoying the attention of the British Ministry of Commonwealth Relations, is an important step in the direction of the political coming of age of Basutoland. In the event of its acceptance it would, without a doubt, influence the relationship between the Union and Basutoland. It would possibly make the incorporation of Basutoland by the Union less likely and even eliminate such a possibility completely. On the other hand it can be a demonstration lesson as to the direction in which the Union can move in connection with its own Bantu territories.
Perhaps the Minister saw The Times last week in which Dr. Verwoerd was stated to be thinking in terms of Bantu states—Pondoland, Zululand, Ciskei and Ternskei, which he intends to develop as a Commonwealth inside the Union, with their own emissaries to Cape Town, while he would send a Lieutenant governor to these Bantu states. Dr. Verwoerd is constantly gibing at us about the lack of development of the High Commission Territories of Basutoland, Swaziland and Bechuanaland. He says in overtones that we do not do enough in social services for these territories. Why cannot we do more than we are doing for our colonies like Basutoland? Why cannot we compete with Dr. Verwoerd and show him that states like Basutoland will be on a par at least with his own Bantu states? Her Majesty's Government must give the Basuto people the urge to build up and compete with the Bantu peoples inside the Union. Let us have more Basuto in the Administration and get away from this paternalism of the past. Give the Basuto a chance to develop and

get away from this over-anxious regard for Dr. Verwoerd and this fear of offending the Union. This is a challenge to the Government, and I am convinced that Basuto people and their leaders will more than vindicate the faith that we place in them.

10.42 p.m.

Mr. Patrick Wall: I congratulate the hon. Member for Rugby (Mr. J. Johnson) on raising this question on the Adjournment. I should like to express from this side of the House the wish for continued good relations with these brave and loyal people. We have all been much impressed by the Basutoland delegation which has been here in the last few weeks.
As he is now in the middle of constitutional talks, I will not press my hon. Friend the Under-Secretary on the subject of political advance. All I would say on this subject is that both sides of the House join in hoping that the Basuto people will be given a greater say in running their own affairs.
I want for a few minutes to discuss education which has already been mentioned by the hon. Member for Rugby. Of course, the snag, as usual, is money. I believe that it is very unfortunate that the teachers who are educated in the secondary schools and universities in Basutoland, tend to go to the Union of South Africa just when they are qualified and can do useful work in their own country. The reason is that the standard of pay for teachers in Basutoland is well below that of the Union of South Africa. Would my hon. Friend look into this and see what can be done?
As throughout the whole of Africa, secondary education could be much improved, particularly in technical and trade schools. But there again, money plays a great part.
I should like to take up a point raised by the hon. Member, namely, the question of the Pope Pius XII University which plays a great rÔle in Southern Africa. I believe that considerable expansion is hoped for and I hope to visit the university during the Christmas Recess and see exactly what is required. I believe they wish to affiliate with the University of London for the reason already given, namely that it will enable them to establish a truly multi-racial university on the


same lines as Salisbury. I hope that my hon. Friend, as far as it lies in his power, will encourage that aim.
I understand, however, that there is one difficulty, namely, that this affiliation would mean a five-year degree course, which might well be too long for people in an emergent, growing country which wants to have educated people in circulation, if I may put it in that way, as soon as possible. If this affiliation with London proves a real difficulty, perhaps affiliation with some provincial university or with Edinburgh University, where I understand the degree course is three years, could be considered. This would, perhaps, be more suitable for the Basuto people.
I understand that the grants made to the various religious denominations vary very much in size. The religious denominations, both Protestant and Catholic, are doing fine work in the Territory, but I think I am right in saying that the disparity in grants between the denominations causes certain difficulties. Perhaps my hon. Friend might consider this also in relation to education policy for the Territory.
I hope that Her Majesty's Government will be generous both politically and financially in their discussions with these loyal and happy people. After all, it is up to us to show that our system of government is better than the system practised by the existing Government in the Union of South Africa. In Bechuanaland and Basutoland, we have a test case in order to show that our ideas of freedom and democracy and our leadership of the emergent peoples offer them a better future than is offered by the present Government in the Union of South Africa.

10.46 p.m.

The Under-Secretary of State for Commonwealth Relations (Mr. C. J. M. Alport): The hon. Member for Rugby (Mr. J. Johnson) who opened this debate on Basutoland asked me to refer to the constitutional discussions which we are at present holding with the Basutoland delegation, led by Professor Cowen. I am afraid that I must disappoint him. At this stage, I can only say that my noble Friend hopes to make a statement on these negotiations before Parliament rises. One thing I can tell him is that there is now a branch of Barclays Bank

in Maseru, though what significance he will draw from that I am not quite clear.
Both the hon. Gentleman the Member for Rugby and my hon. Friend the Member for Haltemprice (Mr. Wall) concentrated most of their remarks on education, and I fully agree with the hon. Member for Rugby that the thirst and desire for education in Basutoland is, perhaps, greater than it is in any High Commission Territory. When I was in Basutoland last June, I had the opportunity of seeing something of the educational progress which has been undertaken both by the Government and also by the three great missionary societies which work there.
I did not have a chance of visiting the headquarters of the French Evangelical Mission, although I did learn a good deal about its work and some of its many difficulties in conversation with its leaders. I spent a day at Roma, and I am delighted to know that my hon. Friend the Member for Haltemprice intends to go there, if only for a brief visit. It is a most interesting experiment in higher education in Southern Africa. I had the opportunity of meeting both Bishop des Rosiers and Father Guilbeault, who is rector of Pope Pius XII College.
As my hon. Friend said, this college is associated at present with the University of South Africa. That is purely for academic purposes. It meets the normal degree requirements of 'bachelor of art, bachelor of science and bachelor of commerce. In recent months, there has been a great deal of first class building undertaken by the college authorities. With these improved facilities and further improvements which will take place in the near future, it is fairly certain that during the course of the next few years, Pope Pius XII College will be able to absorb most of the likely Basuto matriculants. The college not only takes students from Basutoland but also from other High Commission territories and the Federation of Rhodesia and Nyasaland, and reciprocally the University College of Rhodesia and Nyasaland takes students from Basutoland. I personally hope that this exchange of students will increase in the future.
As for my hon. Friend's point about the affiliation of Pope Pius XIIth College to some other University, I should like to study his remarks and the contribution made by the hon. Member for Rugby.
Under the overall direction of the Education Department, there were in Basutoland last year 116,000 Basuto children at school, which we estimate as being more than 50 per cent. of the child population, and most of them are attending the higher or lower primary schools run by the two missions to which I have referred, and by the Church of England Mission, which, with the somewhat more limited resources available to it, has been doing splendid work in Basutoland under the leadership of the Bishop. Grants-in- aid are paid by the Basutoland Government to the tune of £238,700 a year to assist and supplement the salaries of all teachers on the approved establishments. Indeed, 20 per cent. of the Territory's total revenue is spent on education, and there is really a substantial number of lower and higher primary schools available in Basutoland, and of teachers to work there, although I would not claim that we are ever satisfied with the existing circumstances, particularly regarding education.
Although some progress has been made recently in the technical and agricultural field, I hope the resources of the Territory would enable further expansion to take place in due course. That must depend in some degree on the development of the country's economy. This, after all, is based on agriculture and it has been true for a long time that the amount of land available has been insufficient to provide the average needs of all families. The result has been that the economy has been greatly assisted by the movement of something like 100,000 or 150,000 men at any one time into employment in the mines and farms of the Union.
The Basuto have the reputation generally for hard work and reliability, particularly in the mines, and I am certain that mine managements would agree that they have contributed greatly in turn to the development of the mining industry in various parts of the Union.
It is extremely disappointing that up to the present it has not been possible to discover any substantial mineral resources in Basutoland itself. Quite recently Colonel Jack Scott, whose family have had a long association with Basutoland, was given certain prospecting and mining rights by the Paramount Chief, and has

shown great energy and initiative in his search for diamonds. But so far his success has been limited and I can only hope, in the interests of Basutoland, that his efforts will obtain a better reward in the future.
There have been rumours of the presence of uranium and thorium in the Territory, but I have no information which confirms that that is so. Indeed, the information that we have on this is, frankly, negative. But it may well be that there is a good case for a follow up to the minerals search that was carried out some years ago, and the truth of the matter is that if one takes the example of Swaziland, the potential development not only in agriculture but in minerals there has made a tremendous difference to Swaziland, transforming it, perhaps, from the Cinderella to the most highly developed of the three High Commission Territories.
A similar windfall in Basutoland could change overnight the economic prospects of this Territory. I know that the Basuto themselves are keenly alive to their own economic interest in the finding of mineral resources in their Territory, and they know they are safeguarded in this because the rights to these are vested in the paramount chief, in trust for the Basuto nation.
In developing their arguments, hon. Members opposite, like the hon. Member for Rugby, tend to give the impression that the United Kingdom does very little for these Territories. I am not complaining about that; I have no doubt that when I sat on the benches opposite I took the same sort of line. But we have made a substantial contribution to the development of Basutoland between I945 and 1955, and, indeed, right up to the present day. Under the Colonial Development and Welfare Acts £2¼ million has been allocated, and £1½ million actually spent upon various forms of development. In addition, there has been a loan programme of £500,000, running up to 1960. In the allocation of these moneys particular attention is being paid to the improvement of communications, both of roads and telephones, and the extension of water supplies. Indeed, no one who has visited the Territory and been up the mountain road can be other than impressed at the feat of engineering which it represents.
Apart from any assistance that we may be able to give, Basutoland depends primarily upon its agricultural and pastoral activities. I know of no land that is so treeless, or so much in need of modern methods of soil conservation. if the hon. Member were to go there now he would still find it pretty treeless, despite the efforts made to plant millions of trees. He would, however, be greatly impressed with the progress made in soil conservation in certain agricultural schemes in different parts of the Territory.
This work takes time, and requires patience, when it affects long-established rights, but the evidence I saw at the agricultural training school, and the expansion of co-operative organisations in the Territory, are clear proof that the Basuto are energetic and enterprising, and keenly anxious to improve their own standards of living by the introduction of modern methods of marketing organisation. Her Majesty's Government are only too anxious to assist in that, because we realise clearly the importance of making a contribution to a Territory which has been more than normally handicapped by

lack of economic resources in these many years.
The hon. Member for Rugby referred to the "failure" of Her Majesty's Government with regard to the appointment of Basuto civil servants. I would only say that, hitherto, the emphasis has been placed upon the junior service, which is practically all-African at present and consists of about 1,000 civil servants, but a start has been made—and I am sure that this is most important—upon the appointment of Africans to the senior service, and 17 have already become members of that service. I can assure the hon. Member that as it becomes possible, with the coming forward of candidates with the sort of qualifications required, we will continue to promote this policy.

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at one minute to Eleven o'clock.